Vacation ownership company Marriott Vacations (NYSE:VAC) beat analysts' expectations in Q4 FY2023, with revenue flat year on year at $1.19 billion. It made a non-GAAP profit of $1.88 per share, down from its profit of $2.74 per share in the same quarter last year.

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Marriott Vacations (VAC) Q4 FY2023 Highlights:

• Revenue: $1.19 billion vs analyst estimates of $1.15 billion (4.3% beat)

• EPS (non-GAAP): $1.88 vs analyst estimates of $1.78 (5.7% beat)

• Gross Margin (GAAP): 74.9%, down from 76.7% in the same quarter last year

• Market Capitalization: $3.05 billion

“After a challenging year, we ended the year on a very positive note, growing contract sales by 4% in the fourth quarter on a year-over-year basis with VPG in-line with the prior year, after adjusting for the estimated impact of the Maui wildfires,” said John Geller, President and Chief Executive Officer.

Spun off from Marriott International in 1984, Marriott Vacations (NYSE:VAC) is a vacation company providing leisure experiences for travelers around the world.

Hotels, Resorts and Cruise Lines

Hotels, resorts, and cruise line companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted from buying "things" (wasteful) to buying "experiences" (memorable). In addition, the internet has introduced new ways of approaching leisure and lodging such as booking homes and longer-term accommodations. Traditional hotel, resorts, and cruise line companies must innovate to stay relevant in a market rife with innovation.

Sales Growth

A company's long-term performance can indicate its business quality. Any business can enjoy short-lived success, but best-in-class ones sustain growth over many years. Marriott Vacations's annualized revenue growth rate of 9.8% over the last five years was weak for a consumer discretionary business.

Within consumer discretionary, a long-term historical view may miss a company riding a successful new property or emerging trend. That's why we also follow short-term performance. Marriott Vacations's annualized revenue growth of 10.2% over the last two years aligns with its five-year revenue growth, suggesting the company's demand has been stable.

This quarter, Marriott Vacations's $1.19 billion of revenue was flat year on year but beat Wall Street's estimates by 4.3%. Looking ahead, Wall Street expects sales to grow 2.6% over the next 12 months, an acceleration from this quarter.