Marriott Vacations Worldwide Corp Reports Resilience Despite Challenges in Q4 and Full Year 2023
Contract Sales: Q4 contract sales declined by 2% year-over-year but adjusted for the Maui wildfires, would have grown by 4%.
Net Income: Reported at $35 million for Q4, with an adjusted figure of $52 million considering the Maui wildfires.
Adjusted EBITDA: Reached $186 million in Q4, with an adjusted $210 million after accounting for the Maui wildfires.
Share Repurchase and Dividends: VAC repurchased 431,000 shares for $38 million and increased its quarterly dividend to $0.76 per share in Q4.
Full Year 2024 Outlook: The company provides guidance with contract sales expected between $1,880 to $1,930 million and adjusted EBITDA forecasted at $760 to $800 million.
Liquidity: Ended the year with $929 million in liquidity, including cash and available credit facilities.
On February 21, 2024, Marriott Vacations Worldwide Corp (NYSE:VAC) released its 8-K filing, detailing its financial performance for the fourth quarter and full year of 2023. Despite facing challenges such as the Maui wildfires, which impacted contract sales and overall financial results, the company demonstrated resilience and strategic adaptability.
Marriott Vacations Worldwide Corp operates in the leisure industry, primarily in the United States, with a portfolio of resorts and accommodation facilities under renowned brands. The company's revenue streams include the sale of vacation ownership products and purchase money financing to customers. With two reportable segments, Vacation Ownership and Exchange & Third-Party Management, the majority of its revenue comes from the Vacation Ownership segment.
Performance Amidst Adversity
The fourth quarter saw a slight decline in consolidated Vacation Ownership contract sales by 2% year-over-year to $447 million, attributed to a 2% lower volume per guest (VPG). However, after adjusting for the estimated impact of the Maui wildfires, contract sales would have shown a 4% growth, with tours increasing by 4% and VPG remaining steady compared to the previous year.
Net income attributable to common stockholders was reported at $35 million, with fully diluted earnings per share (EPS) at $0.93. Adjusted net income, which accounts for the impact of the Maui wildfires, was $75 million, with adjusted fully diluted EPS at $1.88. Adjusted EBITDA for the quarter reached $186 million, with an adjusted figure of $210 million post-adjustment for the wildfires.
Financial Achievements and Outlook
The company's financial achievements in the fourth quarter included the repurchase of 431,000 shares of its common stock for $38 million and an increase in its quarterly dividend to $0.76 per share. For the full year, VAC repurchased 6% of its shares outstanding for $286 million and paid $106 million in dividends, signaling confidence in its financial health and commitment to shareholder returns.
Looking ahead, Marriott Vacations Worldwide Corp has provided guidance for the full year 2024, with contract sales expected to range between $1,880 to $1,930 million, and adjusted EBITDA forecasted to be between $760 to $800 million. These projections reflect the company's positive outlook and strategic initiatives to leverage technology for revenue growth and operational efficiency.
Liquidity and Capital Management
At the end of 2023, Marriott Vacations Worldwide Corp maintained a strong liquidity position with $929 million, including $248 million in cash and cash equivalents. The company's balance sheet reflected $3.0 billion of corporate debt and $2.1 billion of non-recourse debt related to its securitized notes receivable.
The company's proactive capital management, as evidenced by its share repurchases and dividend payments, along with its robust liquidity, positions it well to navigate future market conditions and invest in growth opportunities.
In conclusion, Marriott Vacations Worldwide Corp's fourth quarter and full-year 2023 results demonstrate the company's ability to manage external challenges while maintaining a focus on long-term growth and shareholder value. The company's strategic outlook for 2024 suggests a continued commitment to leveraging its strengths in the vacation ownership market.
Explore the complete 8-K earnings release (here) from Marriott Vacations Worldwide Corp for further details.
This article first appeared on GuruFocus.
