Marriott (MAR) Gears Up for Q2 Earnings: What's in Store?
Marriott International, Inc. MAR is scheduled to release second-quarter 2022 results on Aug 2, 2022, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 31.6%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the second-quarter bottom line is pegged at $1.59 per share, indicating growth of 101.3% from 79 cents reported in the year-ago quarter.
Marriott International, Inc. Price and EPS Surprise
Marriott International, Inc. price-eps-surprise | Marriott International, Inc. Quote
For revenues, the consensus mark is pegged at $4,970 million, suggesting growth of 57.8% from the prior-year quarter’s reported figure.
Let's take a look at how things have shaped up in the quarter.
Key Factors to Note
Marriot’s second-quarter performance is likely to have benefited from robust leisure demand and business and cross-border travel improvements. During the previous-quarter earnings call, the company stated that cross-border guests accounted for 14% of global room nights, up 100 basis points sequentially. Also, it reported a solid group revenue pace backed by pent-up demand (for group travel) and strong booking trends. With additional markets now open and international travelers returning on the road, Marriot’s business is likely to have picked up on strong leisure demand combined with improving business transient trends. Emphasis on unit expansion strategies, hotel conversions and new project developments are likely to have aided the company’s performance in the second quarter.
Increased focus on the Marriott Bonvoy loyalty program bodes well for the company. During the previous quarter, the company reported a rise in digital bookings (up 14% from 2019 levels) and an increase in redemption activity. Also, It reported increased member engagement with respect to its Bonvoy co-brand cards (with new card acquisitions and card spending increasing year over year). Given the meaningful pickup in demand coupled with solid customer acceptance for credit card programs, the momentum is likely to have continued in the second quarter. The Zacks Consensus Estimate for second-quarter base management revenues and franchise fees is pegged at $277 million and $584 million, indicating year-over-year growth of 77.6% and 35.5%, respectively.
Coronavirus-induced travel restrictions (in China), supply chain disruptions, labor shortages and geopolitical tensions are likely to have affected the company’s operations in the second quarter. Although RevPAR and occupancy rate are likely to have improved sequentially, these metrics are expected to have remained below pre-pandemic levels.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Marriott this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Marriott has an Earnings ESP of +7.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company has a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks Poised to Beat Earnings Estimates
Here are some other stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these too have the right combination of elements to post an earnings beat.
Callaway Golf Company ELY has an Earnings ESP of +2.69% and a Zacks Rank of 2.
Shares of Callaway Golf have declined 29.5% in the past year. ELY’s earnings surpassed the consensus mark in all the trailing four quarters, the average being 955.5%.
Under Armour, Inc. UAA has an Earnings ESP of +1.05% and a Zacks Rank of 3.
Shares of Under Armour have declined 56.1% in the past year. UAA’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 103.8%.
Dolby Laboratories, Inc. DLB has an Earnings ESP of +5% and a Zacks Rank #3.
Shares of Dolby Laboratories have declined 22.5% in the past year. DLB’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 14.7%.
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