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Marriott Vacations' (VAC) Q2 Earnings & Revenues Top Estimates

Marriott Vacations Worldwide Corporation VAC reported impressive second-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.

The company’s CEO, Stephen P. Weisz, stated, “We introduced Abound by Marriott Vacations during the quarter, an exclusive new program providing more options and access for Owners. With the strong recovery of our operations, as well as cash proceeds from dispositions, we accelerated our return of cash to shareholders, surpassing $500 million this year through the end of July.”

Earnings & Revenues Discussion

During second-quarter 2022, the company reported adjusted earnings per share (EPS) of $2.87, surpassing the Zacks Consensus Estimate of $2.28 by 25.9%. In the year-ago quarter, the company had reported adjusted earnings of 85 cents per share.

Quarterly revenues of $1,164 million beat the consensus mark of $1,155 million. The top line increased 18.9% on a year-over-year basis.

Segmental Performances

Vacation Ownership: During the second quarter, revenues in the segment totaled $1,091 million, up 23.6% from $883 million reported in the prior-year quarter. Revenues, excluding cost reimbursements, increased 28% year over year.

The segment’s adjusted EBITDA came in at $274 million, up 51% year-over-year.

Exchange & Third-Party Management: The segment’s revenues totaled $74 million in the second quarter, down 14% from $86 million reported in the prior-year quarter. Revenues, excluding cost reimbursements, decreased 4% year over year.

During the second quarter, interval international active members increased 21% year over year to 1.6 million, while average revenues per member declined 16% on a year-over-year basis. The segment’s adjusted EBITDA came in at $35 million compared with $37 million reported in the prior-year quarter.

Corporate and Other Results

During the second quarter, general and administrative costs decreased by $2 million year over year, owing to lower bonus expenses.

Expenses & EBITDA

Total expenses in the quarter increased 10% year over year to $957 million from $870 million reported in the year-ago quarter.

The company’s adjusted EBITDA in the second quarter amounted to $255 million compared with $164 million reported in the year-ago quarter.

Balance Sheet

As of Jun 30, 2022, the company’s cash and cash equivalents were $324 million compared with $342 million as of Dec 31, 2021.

At the end of the second quarter, the company had $2.7 billion of net corporate debt and $1.8 billion of non-recourse debt related to its securitized notes receivable.

2022 Outlook

For 2022, the company anticipates contract sales in the range of $1,775-$1,875 million compared with the prior estimate of $1,675-$1,775 million. Adjusted free cash flow is projected in the range of $650-$730 million, up from the earlier estimate of $560-$640 million. Adjusted EBITDA is expected to be between $880 million and $930 million, up from the prior estimate of $860-$920 million. Adjusted fully diluted EPS for 2022 is expected to be between $9.47 and $10.35 compared with the prior estimate of $9.13-$10.09 per share.

Zacks Rank & Key Picks

Marriott Vacations carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Consumer Discretionary sector are G-III Apparel Group, Ltd. GIII, Marriott International, Inc. MAR and Choice Hotels International, Inc. CHH.

G-III Apparel currently sports a Zacks Rank #1. GIII has a trailing four-quarter earnings surprise of 97.5%, on average. The stock has declined 26.5% in the past year.

The Zacks Consensus Estimate for GIII’s current financial year sales and EPS indicates growth of 13.8% and 8.2%, respectively, from the year-ago period’s reported levels.

Marriott currently carries a Zacks Rank #2. MAR has a trailing four-quarter earnings surprise of 1.4%, on average. The stock has increased 36.2% in the past year.

The Zacks Consensus Estimate for MAR’s current financial year sales and EPS indicates growth of 44.6% and 93.7%, respectively, from the year-ago period’s reported levels.

Choice Hotels carries a Zacks Rank #2, at present. CHH has a trailing four-quarter earnings surprise of 20.4%, on average. The stock has increased 4% in the past year.

The Zacks Consensus Estimate for CHH’s current financial year sales and EPS indicates growth of 13.6% and 17.7%, respectively, from the year-ago period’s reported levels.


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Marriott International, Inc. (MAR): Free Stock Analysis Report
 
Choice Hotels International, Inc. (CHH): Free Stock Analysis Report
 
GIII Apparel Group, LTD. (GIII): Free Stock Analysis Report
 
Marriot Vacations Worldwide Corporation (VAC): Free Stock Analysis Report
 
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