Hyatt (H) to Report Earnings for Q3: Here's What to Expect
Hyatt Hotels Corporation H is scheduled to report its third-quarter 2023 results on Nov 2, before the opening bell.
In the previous quarter, the company’s earnings missed the Zacks Consensus Estimate by 1.2%, while revenues beat the same by 3.3%.
Hyatt’s earnings topped the consensus mark in two of the trailing four quarters and missed on the other two occasions, the average surprise being 197.3%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the third-quarter bottom line is pegged at 60 cents per share, indicating a fall of 6.3% from earnings of 64 cents per share reported in the year-ago quarter.
Hyatt Hotels Corporation Price and EPS Surprise
Hyatt Hotels Corporation price-eps-surprise | Hyatt Hotels Corporation Quote
For revenues, the consensus mark is pegged at $1,623 million, suggesting growth of 5.3% from the prior-year quarter’s reported figure.
Let's look into the factors that are likely to have influenced the quarter.
Factors at Play
Hyatt’s third-quarter 2023 top-line performance is likely to have benefited from robust leisure and business travel demand, the easing of travel restrictions (primarily in Greater China), a favorable pricing scenario and heightened airline capacity. These factors are likely to have driven occupancy rates and the average daily rate (“ADR”), resulting in higher revenue per available room (“RevPAR”) growth. New hotel openings, loyalty programs, accretive acquisitions and business operating strategies are expected to have aided the company.
Reportable segment-wise, owned and leased hotels segment’s growth is likely to reflect a solid improvement in business transient and group travel demand. For the third quarter, our model predicts RevPAR for comparable owned and leased hotels to increase 26.9% to $224.88 year over year. We expect occupancy rates and ADR to increase by 1,000 basis points (bps) to 79.3% and 10.9% to $283.59, respectively compared with the prior-year quarter.
For the third quarter, we predict adjusted revenues of Americas Management and Franchising, ASPAC Management and Franchising and Apple Leisure Group segments to increase by 3.7% to $160.7 million, 26.4% to $32.9 million and 4.6% to $352.4 million, respectively, year over year. We also anticipate the Management, Franchise and Other fee revenues to increase by 4.5% to $213.3 million. We expect EAME/SW Asia Management and Franchising to decline by 13% to $26.1 million.
For the to-be-reported quarter, we expect comparable systemwide hotels’ RevPAR to increase 5% to $140.04 year over year. This reflects our expectations for ADR and occupancy rates to increase by 0.5% to $197.51 and 300 bps to 70.9%, year over year.
We anticipate total managed and franchised properties to increase by 11.2% to 1,347 in the quarter compared with the prior year.
Given the market recovery phase, the company expects future booking trends to remain strong, enabling solid top-line growth.
However, ongoing inflationary pressures and economic challenges have been major concerns amid a solid global market recovery. For the third quarter, our model predicts adjusted EBITDA and operating margins to decrease 100 bps to 15.4% and 50 bps to 9.6%, respectively, year over year.
Reportable segment-wise, we expect adjusted EBITDA to increase year over year for owned and leased hotels and ASPAC segments by 16.1% to $76.6 million and 3.2% to $15.5 million, respectively. However, we anticipate Americas, EAME/SW Asia and ALG segments’ adjusted EBITDA to fall by 1.2% to $112.6 million, 20% to $16.8 million and 22.3% to $60.6 million, respectively.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Hyatt this time around. The company does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings beat.
Earnings ESP: Hyatt has an Earnings ESP of +6.33%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #3.
Other Stocks Poised to Beat Estimates
Here are some other stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to deliver an earnings beat this time around.
MGM Resorts International MGM has an Earnings ESP of +2.61% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
MGM’s earnings surpassed the consensus mark in three of the four quarters and missed once, the average surprise being 105.7%.
DraftKings Inc. DKNG has an Earnings ESP of +17.52% and a Zacks Rank #3.
DKNG’s earnings outshined the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 12%.
Cinemark Holdings CNK currently has an Earnings ESP of +12.44% and a Zacks Rank #3. The Zacks Consensus Estimate for its quarterly revenues is pegged at $839.65 million, suggesting 29.1% growth from the year-ago quarter’s figure.
The Zacks Consensus Estimate for Cinemark Holdings’ third-quarter earnings is pegged at 42 cents, suggesting 310% growth from that reported in the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Hyatt Hotels Corporation (H) : Free Stock Analysis Report
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DraftKings Inc. (DKNG) : Free Stock Analysis Report
