Marriott International Q3 Earnings: China Market Weakness Drags on Performance, Adjusts Full-Year Outlook

Marriott International MAR stock fell Monday after its third-quarter print.

The company reported a third-quarter adjusted EPS of $2.26, missing the street view of $2.31. Quarterly sales of $6.26 billion marginally missed the analyst consensus of $6.27 billion.

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RevPAR in the U.S. and Canada increased 2.1%, and RevPAR in international markets increased 5.4%, as Greater China RevPAR declined 7.9%.

Adjusted EBITDA for the quarter was $1.23 billion, up from $1.14 billion in the year-ago period.

Base management and franchise fees totaled $1.12 billion in the quarter, up 7%. Incentive management fees totaled $159 million in the 2024 second quarter, compared to $143 million a year ago.

At the end of the quarter, Marriott's global development pipeline included around 3,800 properties and over 585,000 rooms.

This total comprises approximately 34,000 rooms approved but not yet under signed contracts, with more than 220,000 rooms currently under construction.

At the end of the quarter, Marriott's total debt was $13.6 billion, and cash and equivalents totaled $0.4 billion.

CEO Anthony Capuano highlighted Marriott's strong quarter, noting solid net room and fee growth, active development, and a 3% rise in global RevPAR. He added that third-quarter international RevPAR increased by 5.4%, driven by substantial growth in APEC and EMEA regions, steady domestic and cross-border demand, and strong ADR gains.

Outlook: Marriott expects fourth-quarter 2024 gross fee revenues to range between $1.29 billion and $1.31 billion, with adjusted EPS projected to be $2.31-$2.39, compared to a $2.31 estimate.

Marriott projects full-year 2024 adjusted EPS of $9.19-$9.27 (prior $9.23-$9.40), compared to the $9.36 estimate, with gross fee revenues of $5.126 billion-$5.146 billion (prior $5.13 billion-$5.18 billion).

Marriott International stock gained close to 18% year-to-date.

Price Action: MAR stock is down 1.37% to $257.00 premarket at last check Monday.

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