Wyndham Hotels (WH) Tops Q4 Earnings Estimate, Unveils '24 View
Wyndham Hotels & Resorts, Inc. WH reported decent fourth-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. However, the bottom line increased on a year-over-year basis, but the top line declined.
Driven by the company's global strategy, WH's fourth-quarter results reflect ongoing success and accelerating momentum. Despite distractions from Choice and its biased communications, the company's room openings increased, and the global development pipeline expanded. The company remains confident in the effectiveness of its growth strategy, foreseeing significant value-creation opportunities ahead.
Earnings & Revenue Discussion
Wyndham Hotels reported adjusted earnings per share (EPS) of 91 cents, which beat the Zacks Consensus Estimate of 90 cents by 1.1%. The reported value grew 26% from the year-ago quarter’s reported adjusted EPS of 72 cents.
Quarterly net revenues of $321 million surpassed the consensus mark of $317.2 million by 1.2%. The metric fell 3.9% from the year-ago quarter’s level of $334 million.
Wyndham Hotels & Resorts Price, Consensus and EPS Surprise
Wyndham Hotels & Resorts price-consensus-eps-surprise-chart | Wyndham Hotels & Resorts Quote
During the quarter, fee-related and other revenues increased 3.2% year over year to $320 million. The upside was backed by global net room growth and higher license and ancillary fees.
Within the fee-related and other revenues, royalties and franchise fees declined 0.8% to $117 million year over year. Marketing, reservation and loyalty and, License and other fees rose 3.9% to $133 million and 11.5% to $29 million year over year, respectively. Management and other fees were on par with the prior-year quarter at $3 million. Other revenues increased 8.6% to $38 million compared with the year-ago quarter’s levels.
RevPAR and Adjusted EBITDA
In the quarter under review, global RevPAR declined 1% year over year (on a constant currency basis), reflecting a 4% decline in the United States and growth of 7% internationally.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the fourth quarter was $154 million, up 22% year over year.
2023 Highlights
Total revenues were down 6.7% to $1,397 million compared with $1,498 million reported in the year-ago period. During 2023, Wyndham Hotels’ adjusted earnings were $4.01 per share, up 1.3% from 2022 reported earnings of $3.91 per share.
Fee-related and other revenues were $1,384 million, up 2.2% from $1,354 million in 2022.
In 2023, global RevPAR (on a constant currency basis) grew 5% compared with the 2022 reported value, reflecting a 1% decline in the U.S. and growth of 21% internationally.
Wyndham Hotels reported adjusted EBITDA of $659 million in 2023, up 1.4% from $650 million reported in 2022.
Balance Sheet
As of Dec 31, 2023, the cash balance was $66 million compared with $79 million reported in the prior quarter. The total debt was $2,201 million, up from $2,077 million at the end of 2022.
During the quarter, Wyndham Hotels repurchased 1.7 million shares of its common stock worth approximately $127 million. In 2023, the company repurchased a total of 5.5 million shares for $72.25 of average price per share.
Management declared a 9% increase in its quarterly cash dividend to 38 cents per share.
Unit Developments
In 2023, Wyndham Hotels opened a record 66,000 organic rooms, up 3% year over year. System-wide rooms grew by 3.5% year over year organically.
As of Dec 31, 2023, Wyndham Hotels’ development pipeline comprised nearly 1,950 hotels, with almost 240,000 rooms, up 10% year over year.
2024 Outlook
For 2024, the company estimates fee-related and other revenues in the range of $1.43-$1.46 billion. The adjusted net income is expected to be in the range of $341-$351 million. Adjusted EBITDA is expected to be between $690 million and $700 million.
Wyndham Hotels expects 2024 adjusted diluted EPS in the range of $4.11-$4.23.
Management anticipates 2024 global RevPAR to increase 2-3% year over year. Room growth is estimated to be between 3% and 4%.
Zacks Rank & Recent Consumer Discretionary Releases
Wyndham Hotels currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Hilton Worldwide Holdings Inc. HLT reported impressive fourth-quarter 2023results, with earnings and total revenues topping the Zacks Consensus Estimate and increasing on a year-over-year basis.
The company’s quarterly results benefited from a solid improvement in revenue per available room (RevPAR) on the back of increased occupancy rates and average daily rate (ADR). During the quarter, HLT witnessed a record number of openings, which encouraged the uptrend to a great extent. The company states that it is well-positioned to continue driving innovation and growth through 2024, owing to the improving trends.
Marriott International, Inc. MAR reported mixed fourth-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate, but revenues missed the same. The top and bottom lines increased on a year-over-year basis. The upside was backed by solid leisure demand and recovery in business transient and group demand. It also benefited from its fee-driven, asset-light business model.
The company reported strength in The Marriott Bonvoy loyalty program, comprising 196 million members as of 2023-end. It expanded its co-brand credit card offerings to 31 cards (across 11 countries), representing an increase of 11% in global card spending on a year-over-year basis.
Hasbro, Inc. HAS reported tepid fourth-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate and declining year over year.
The quarter’s downtrend was primarily attributable to the low contributions from the Consumer Products and Entertainment segments, partially offset by growth in the Wizards of the Coast and Digital Gaming segment. The challenging macroeconomic scenario was discouraging for the company’s prospects.
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