Marriott Vacations Worldwide Corporation VAC reported mixed third-quarter 2021 results, with earnings meeting the Zacks Consensus Estimate and revenues missing the same. Following the announcement, shares of the company dropped 1.4% during trading hours on Nov 8.
Despite softness in few markets due to the Delta variant, management stated that it witnessed strong occupancies (at pre-pandemic levels for most of its North America resorts) and solid contract sales.
Stephen P. Weisz, CEO, stated, “First time buyers represented more than 30% of contract sales in the third quarter, which is important for the long-term health of the system. The fourth quarter has started well with October contract sales above 2019 levels and reservations on the books for the first half of next year are already strong.”
Q3 Earnings and Revenues
Marriot Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Marriot Vacations Worldwide Corporation price-consensus-eps-surprise-chart | Marriot Vacations Worldwide Corporation Quote
The company reported adjusted earnings per share (EPS) of $1.60, in line with the Zacks Consensus Estimate. In the year-ago quarter, the company had reported an adjusted loss of 81 cents per share.
Total revenues of $1,052 million missed the consensus mark of $1,053 million by 0.1%. However, the top line increased 62.1% on a year-over-year basis.
Vacation Ownership: During the third quarter, the segment’s revenues significantly increased 70.6% year over year to $974 million from $571 million. Revenues, excluding cost reimbursements, increased 123% year over year. The figure improved 8% from second-quarter 2021 levels. In the third quarter, revenues from sale of vacation ownership products increased 12% and development profit margin increased to 28%, quarter over quarter.
The segment’s adjusted EBITDA came in at $215 million compared with $28 million reported in the prior-year quarter.
Exchange & Third-Party Management: The segment’s revenues totaled $77 million in the third quarter, up 8.5% from $71 million in the prior-year quarter.
During the third quarter, interval international active members declined 1% (compared with the previous quarter’s levels) to 1.3 million. Average revenue per member declined 7.4% quarter over quarter to $42.95. The segment’s adjusted EBITDA declined $2 million to $35 million, quarter over quarter.
Corporate and Other Results
During the third quarter, general and administrative costs increased $22 million year over year on an increase in salary and wages costs, higher bonus expenses and a downside in credits related to incentives under the CARES Act.
Expenses & EBITDA
Total expenses in the quarter increased 33.1% year over year to $896 million from $673 million reported in the year-ago quarter.
The company’s adjusted EBITDA in the third quarter amounted to $205 million compared with $35 million reported in the year-ago quarter.
As of Sep 30, 2021, cash and cash equivalents were $0.4 billion compared with $1.3 billion as of Jun 30, 2021.
The company had $4.4 billion in debt outstanding (net of unamortized debt issuance costs) at the end of the third quarter compared with $5.3 billion in the previous quarter. This includes $2.8 billion of corporate debt and $1.6 billion of non-recourse debt related to its securitized notes receivable.
Zacks Rank & Key Picks
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.
Some better-ranked stocks in the Zacks Consumer Discretionary sector include Golden Entertainment, Inc. GDEN, BJ’s Wholesale Club Holdings, Inc. BJ and Choice Hotels International, Inc. CHH. Golden Entertainment sports a Zacks Rank #1, while BJ’s Wholesale Club and Choice Hotels carry a Zacks Rank #2 (Buy).
Golden Entertainment’s 2021 earnings are expected to surge 239.4%.
BJ’s Wholesale Club has a trailing four-quarter earnings surprise of 25.6%, on average.
Choice Hotels has three-five-year EPS growth rate of 35.2%.
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