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Hyatt (H) Q4 Earnings & Revenues Miss Estimates, Stock Down

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Hyatt Hotels Corporation H reported dismal fourth-quarter 2021 results, with earnings and revenues missing the Zacks Consensus Estimate. Although the top line increased from the prior-year quarter’s levels, the bottom line declined on a year-over-year basis. Following the announcement, shares of the company fell 5.2% during the afterhours trading session on Feb 16.

Q4 Earnings & Revenues

During the fourth quarter, Hyatt reported an adjusted loss per share of $2.78, wider than the Zacks Consensus Estimate of a loss of 12 cents. In the prior-year quarter, the company reported an adjusted loss of $1.77 per share.

Quarterly revenues of $1,076 million missed the consensus mark of $1,150 million by 6.4%. However, the top line surged 153.3% on a year-over-year basis.

Hyatt Hotels Corporation Price, Consensus and EPS Surprise

Hyatt Hotels Corporation Price, Consensus and EPS Surprise
Hyatt Hotels Corporation Price, Consensus and EPS Surprise

Hyatt Hotels Corporation price-consensus-eps-surprise-chart | Hyatt Hotels Corporation Quote

Operating Highlights

During the quarter, adjusted EBITDA came in at $112 million against $(98) million reported in the year-ago quarter. Adjusted EBITDA margin increased to 19.2% in the fourth quarter against a fall of 59.8% reported in the year-ago quarter.

Segmental Details

Hyatt manages business through five reportable segments — Owned and Leased Hotels; Americas Management and Franchising; Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising; Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising; and Apple Leisure Group Segment.

During the fourth quarter, revenues in the Owned and Leased Hotels segment totaled $280 million compared with $91 million reported in the prior-year quarter. The upside was primarily driven by improved demand across the portfolio. Meanwhile, Owned and leased hotels RevPAR surged 308.1% from the prior-year quarter’s level. During the quarter, the average daily rate (ADR) was up 49.6% and the occupancy rate increased 33.9 percentage points from 2020 levels.

The segment’s adjusted EBITDA came in at $57 million during the fourth quarter against $(48) million reported in the year-ago quarter.

During the quarter, total management and franchise fee revenues came in at $124 million compared with $47 million reported in the year-ago quarter. That said, the metric rose sequentially from $96 million reported in third-quarter 2021.

In Americas Management and Franchising, RevPAR for comparable Americas full-service hotels (during the third quarter) surged 266.1% from the prior-year quarter’s level. While ADR increased 36.2%, occupancy rates increased 33.5 percentage points from the prior-year quarter’s number.

RevPAR for comparable Americas select-service hotels was up 107.1% year over year. ADR increased 35.9% and occupancy rates improved 22.4 percentage points from the year-ago quarter’s number.

Adjusted EBITDA during the fourth quarter came in at $75 million compared with $9 million reported in the year-ago quarter.

For ASPAC Management and Franchising, RevPAR for comparable ASPAC full-service hotels (during the fourth quarter) increased 3.6% from the year-ago quarter’s figure. ADR increased 4.1% year over year. However, occupancy rates fell 0.3 percentage points from the year-ago quarter’s number.

RevPAR for comparable ASPAC select-service hotels was down 12.4% on a year-over-year basis. ADR increased 8.2% year over year. However, occupancy rates fell 11.9 percentage points from the year-ago quarter’s number.

Adjusted EBITDA during the fourth quarter came in at $8 million compared with $9 million reported in the year-ago quarter.

For EAME/SW Asia Management and Franchising, comparable EAME/SW Asia full-service hotels’ RevPAR surged 228.2% from the year-ago quarter’s level. ADR increased 45.7% and occupancy rates rose 30.8 percentage points from the year-ago quarter’s number.

Adjusted EBITDA during the fourth quarter came in at $13 million against $(3) million reported in the year-ago quarter.

In the Apple Leisure Group (or ALG) Segment, adjusted EBITDA (in November and December 2021) came in at $4 million. During the quarter, the acquisition of the ALG segment added 99 resorts (or approximately 32,000 rooms). As of Dec 31, 2021, its pipeline comprised approximately 9,000 rooms.

Balance Sheet

As of Dec 31, 2021, Hyatt reported cash and cash equivalents of $960 million compared with $2,418 million in the previous quarter. Total debt as of Dec 31, 2021, stood at $3,978 million compared with $2,988 million as of Sep 30, 2021.

The company stated undrawn borrowing availability of $1,493 million under Hyatt's revolving credit facility.

Other Business Updates

Coming to hotel openings, 128 new hotels (or 37,014 rooms) joined Hyatt's system in the fourth quarter of 2021. As of Dec 31, 2021, the company had executed management or franchise contracts for approximately 540 hotels (or 113,000 rooms) compared with 505 hotels (or 103,000 rooms) as of Sep 30, 2021.

2022 Outlook

For 2022, the company expects adjusted selling, general and administrative expenses between $460 million and $465 million. Capital expenditures are projected at approximately $215 million. Unit growth in 2022 is anticipated to grow at approximately 6% on a net-room basis.

2021 Highlights

Total revenues in 2021 came in at $3,028 million compared with $2,066 million in 2020.

Adjusted EBITDA in 2021 came in at $257 million against $(177) million reported in 2020.

In 2021, adjusted diluted earnings per share (EPS) came in at $(5.24) compared with $(5.40) reported in the previous year.

Zacks Rank & Key picks

Hyatt currently has 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 from the Zacks Consumer Discretionary sector are Crocs, Inc. CROX, RCI Hospitality Holdings, Inc. RICK and JAKKS Pacific, Inc. JAKK.

Crocs flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 41.6%, on average. Shares of Crocs have increased 18.7% in the past year.

The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.5% and 23.2%, respectively, from the year-ago period’s levels.

RCI Hospitality flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 63.2%, on average. Shares of RCI Hospitality have gained 14.2% in the past year.

The Zacks Consensus Estimate for RICK’s 2022 sales and EPS suggests growth of 33.9% and 19.6%, respectively, from the year-ago period’s levels.

JAKKS Pacific flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 48.9%, on average. Shares of JAKKS Pacific have increased 37.3% in the past year.

The Zacks Consensus Estimate for JAKK’s 2022 sales and EPS suggests growth of 4.9% and 227.8%, respectively, from the year-ago period’s levels.


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