Marriott Vacations (VAC) Q3 Earnings Lag Estimates, Stock Down
Marriott Vacations Worldwide Corporation VAC reported dismal third-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. The top and the bottom line declined year over year.
Following the results, the stock declined 9.2% in the after-hours trading session on Nov 1. Negative investor sentiments were witnessed as VAC slashed its 2023 outlook.
Earnings & Revenue Discussion
During third-quarter 2023, Marriott Vacations reported adjusted earnings per share (EPS) of $1.20, missing the Zacks Consensus Estimate of $2.19 by 45.2%. In the year-ago quarter, it reported an adjusted EPS of $3.02.
Marriot Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Marriot Vacations Worldwide Corporation price-consensus-eps-surprise-chart | Marriot Vacations Worldwide Corporation Quote
Quarterly revenues of $1,186 million missed the consensus mark of $1,201 million by 1.3%. The top line declined 5.3% on a year-over-year basis.
Segmental Performances
Vacation Ownership: During the third quarter, the segment’s revenues totaled $1,126 million, down 4.7% from $1,182 million reported in the prior-year quarter.
During the quarter, the company’s Vacation Ownership contract sales fell 9.3% year over year to $438 million. The downside was primarily caused by a 7% decline in Volumes Per Guest (or VPG), a 3% decline in tours and a $59 million increase in its loan loss provision. This and the impact of the Maui wildfires added to the downside.
The segment’s adjusted EBITDA during the quarter came in at $195 million, down 23.5% from $255 million reported in the prior-year quarter.
Exchange & Third-Party Management: The segment’s revenues of $64 million declined 9.9% from $71 million reported in the year-ago quarter. Revenues, excluding cost reimbursements, declined 7% year over year.
During third-quarter 2023, interval international active members dropped 1% year over year to 1.6 million. Average revenues per member inched up 1% on a year-over-year basis. Adjusted EBITDA was $31 million, down 20.5% year over year.
Corporate and Other Results
During the third quarter, general and administrative costs totaled $57 million, down 8% year over year. Our estimate for the metric was $67.1 million.
Expenses & EBITDA
During the quarter, total expenses increased 6.8% year over year to $1,081 million from $1,012 million reported in the year-ago quarter. Our estimate for the metric was $1,082.9 million.
Adjusted EBITDA amounted to $150 million compared with $240 million reported in the prior-year quarter. The company anticipates a $24 million negative impact on Adjusted EBITDA from the Maui wildfires and a $49 million impact from the increased loan loss provision in the quarter.
Balance Sheet
As of Sep 30, 2023, Marriott Vacations’ cash and cash equivalents were $265 million compared with $242 million as of Jun 30, 2023.
At the end of the third quarter, the company had $3 billion of corporate debt and $2 billion of non-recourse debt related to its securitized notes receivable.
2023 Outlook
The company has lowered its 2023 expectations considering the estimated impact of the Maui wildfires.
For 2023, management now anticipates contract sales in the range of $1,750-$1,770 million compared with the previous expectation of $1,840-$1,900 million. Adjusted free cash flow is projected in the range of $430-$460 million compared with the prior projection of $540-$600 million. Adjusted EBITDA is estimated to be between $745 million and $765 million compared with the previous anticipation of $880 million and $910 million.
Adjusted EPS is expected to be between $7.44 and $7.78, down from the prior estimate of $9.76 and $10.22.
Zacks Rank & Recent Consumer Discretionary Releases
Marriott Vacations currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Leggett & Platt, Inc. LEG reported tepid third-quarter 2023 results, with earnings and sales missing the Zacks Consensus Estimate.
The top and the bottom line declined on a year-over-year basis. The downtrend was caused by persistent weak demand in the Bedding Products and Furniture and Flooring & Textile Products segments, partially offset by strong demand in the Specialized Products segment.
Adtalem Global Education Inc. ATGE reported impressive results for first-quarter fiscal 2024. Earnings and revenues surpassed their respective Zacks Consensus Estimate and increased year over year, given strong enrollment growth and strategic initiatives.
The company's accelerated performance across five operational pillars highlights its market-leading scale and healthcare focus. The company also raised its fiscal 2024 guidance. With 80,000 students and 300,000 alumni, ATGE is well-equipped to address the critical healthcare provider shortages.
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