Wyndham Hotels & Resorts Inc (WH) Reports Q3 2023 Earnings, Raises Full-Year Outlook
Global RevPAR grew 3% compared to Q3 2022 in constant currency.
System-wide rooms grew 3% year-over-year.
Development pipeline grew 4% sequentially and 12% year-over-year to a record 237,000 rooms.
Returned $134 million to shareholders through share repurchases and a quarterly cash dividend of $0.35 per share.
On October 25, 2023, Wyndham Hotels & Resorts Inc (NYSE:WH) announced its financial results for the third quarter of 2023. The company reported a 3% growth in global RevPAR compared to Q3 2022 and a 3% year-over-year growth in system-wide rooms. The development pipeline also saw a significant increase, growing 4% sequentially and 12% year-over-year to a record 237,000 rooms.
Financial Performance
Wyndham's fee-related and other revenues were $400 million, up from $375 million in Q3 2022. This increase was attributed to global RevPAR and net room growth, higher license and ancillary fees, and the pass-through revenues associated with the company's global franchisee conference in September. The company generated a net income of $103 million, or $1.21 per diluted share, compared to $101 million, or $1.13 per diluted share, in Q3 2022. The increase was reflective of higher adjusted EBITDA in the company's hotel franchising segment and a lower effective tax rate, partially offset by higher interest expense.
Shareholder Returns
During the third quarter, Wyndham returned $134 million to shareholders through $105 million of share repurchases and a quarterly cash dividend of $0.35 per share. Year-to-date through September 30, the company repurchased approximately 3.8 million shares of its common stock for $270 million.
Rejection of Acquisition Proposal
Wyndham's Board of Directors unanimously rejected an unsolicited stock-and-cash proposal by Choice Hotels to acquire the company. The board, along with financial and legal advisors, reviewed Choice's proposal and determined that it was not in the best interest of Wyndham shareholders.
Outlook for 2023
Wyndham has updated its full-year 2023 outlook to reflect the impact of third quarter share repurchase activity. The company expects year-over-year rooms growth of 2-4%, year-over-year global RevPAR growth of 4-6%, and fee-related and other revenues of $1.38-$1.41 billion. Adjusted EBITDA is projected to be $654-$664 million, with adjusted net income of $336-$348 million and adjusted diluted EPS of $3.94-$4.08.
Wyndham Hotels & Resorts Inc (NYSE:WH) remains focused on its growth strategy, which includes continued system expansion through its ECHO Suites by Wyndham brand and further improvements in franchisee retention, as well as the multi-year benefit expected from the U.S. infrastructure bill.
Explore the complete 8-K earnings release (here) from Wyndham Hotels & Resorts Inc for further details.
This article first appeared on GuruFocus.
