Marriott Posts Q2 Earnings Above Street View Helped By Strong Demand; Raises FY23 Outlook

Marriott International Inc MAR reported second-quarter FY23 sales growth of 14% year-on-year to $6.08 billion, beating the analyst consensus of $6.05 billion.

Comparable systemwide constant dollar RevPAR increased 13.5% worldwide, 6% in the U.S. & Canada, and 39.1% in international markets, compared to Q2 FY22.

Total expenses rose 13% Y/Y to $4.9 billion. Adjusted EBITDA for the quarter was $1.22 billion versus $1.01 billion a year ago.

Operating margin for the quarter expanded Y/Y from 17.7% to 18%, with operating income surging 15.4% to $1.09 billion.

Adjusted EPS of $2.26 beat the analyst consensus of $2.19.

The company added about 33,100 rooms globally during Q2.

In Q2, Marriott repurchased 5.2 million shares of common stock for $903 million. The company returned $2.6 billion to shareholders year-to-date through July 28.

"Greater China rebounded quickly once travel restrictions were lifted in January, with second quarter RevPAR surpassing pre-pandemic levels," said President and CEO Anthony Capuano.

"While conditions could change rapidly, booking trends remain solid. We are raising our full year rooms growth and earnings guidance and now expect to return $4.1 billion to $4.5 billion to shareholders in 2023."

Outlook: Marriott raised its FY23 Adjusted EPS outlook to $8.36 - $8.65 ($7.97-$8.42 previous) versus the consensus of $8.36. It raised FY23 gross fee revenues outlook to $4.73 billion - $4.82 billion ($4.6 billion - $4.75 billion previous).

The company expects Q3 Adjusted EPS of $2.00 - $2.09, against the consensus of $2.03. It sees Q3 gross fee revenues of $1.185 billion - $1.210 billion.

Price Action: MAR shares are trading higher by 1.1% at $204.07 on the last check Tuesday.