Hotel Operator Marriott Slips After Mixed Q1 Earnings

Marriott International Inc MAR shares are trading lower after the company's first-quarter adjusted EPS missed estimates.

The company reported first-quarter FY24 sales growth of 6.5% year-on-year to $5.98 billion, beating the analyst consensus estimate of $5.93 billion.

Comparable systemwide constant dollar RevPAR increased 4.2% worldwide, 1.5% in the U.S. & Canada, and 11.1% in international markets, compared to the first-quarter FY23.

Total expenses declined 9% Y/Y to $5.1 billion. Adjusted EBITDA for the quarter was $1.14 billion versus $1.09 billion a year ago.

Operating margin for the quarter contracted Y/Y from 16.9% to 14.7%, with operating income increasing 8% to $876 billion.

Adjusted EPS of $2.13 missed the consensus estimate of $2.17.

The company added about 46,000 rooms globally during the first-quarter. Marriott held $0.4 billion in cash and equivalents as of March 31, 2024.

In first-quarter, Marriott repurchased 4.8 million shares of common stock for $1.2 billion. The company returned $1.7 billion to shareholders year-to-date through April 26.

“We are excited about the launch of MGM Collection with Marriott Bonvoy during the quarter, which added nearly 37,000 rooms to our system from our strategic agreement with MGM Resorts International," said President and CEO Anthony Capuano.

Outlook: Marriott raised FY24 adjusted EPS outlook from $9.18-$9.52 to  $9.31-$9.65 versus an estimate of $10.74.

The company expects second-quarter adjusted EPS of $2.43-$2.48 against an estimate of $2.52.

Price Action: MAR shares are trading lower by 1.03% to $233.78 at last check Wednesday.

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Image created using artificial intelligence via Midjourney.