Marriott Vacations Worldwide Corporation VAC reported fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate after missing in the preceding quarter. The top line increased on a year-over-year basis, but the bottom line declined.
The company's shares jumped 6% in the after-hour trading session on Feb 21, following its earnings release.
Following a challenging year, the company concluded the year positively, with contract sales increasing 4% in the reported quarter from the previous year’s levels. Volumes Per Guest (or VPG) remained consistent with the prior year, adjusting for the estimated impact of the Maui wildfires.
Meanwhile, the company has progressed with the transition to Abound by Marriott Vacations. Looking ahead, the focus is on utilizing technology to boost revenues and enhance efficiency and cost savings across the organization.
Earnings & Revenue Discussion
During fourth-quarter 2023, Marriott Vacations reported adjusted earnings per share (EPS) of $1.88, surpassing the Zacks Consensus Estimate of $1.80 by 4.4%. In the year-ago quarter, it reported an adjusted EPS of $2.74.
Marriott Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Marriott Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Quarterly revenues of $1,194 million topped the consensus mark of $1,146 million by 4.2%. The top line inched up 0.5% on a year-over-year basis.
Segmental Performances
Vacation Ownership: During the fourth quarter, the segment’s revenues totaled $1,133 million, up 1.8% from $1,113 million reported in the prior-year quarter.
During the quarter, the company’s Vacation Ownership contract sales fell 2% year over year to $447 million. The downside was primarily caused by a 2% decline in VPG, a 0.3% decline in tours and a $24 million prior-year reportability benefit. This and the impact of the Maui wildfires added to the downside.
The segment’s adjusted EBITDA during the quarter came in at $261 million, up 2.8% from $254 million reported in the prior-year quarter.
Exchange & Third-Party Management: The segment’s revenues of $62 million are in line with the year-ago reported figure. Revenues, excluding cost reimbursements, declined 2% year over year.
During the fourth quarter, the interval of international active members remained in line with the year-ago figure at 1.6 million. Average revenues per member inched up 2% on a year-over-year basis. Adjusted EBITDA was $30 million, down 3.2% year over year.
Corporate and Other Results
During the fourth quarter, general and administrative costs totaled $84 million, down 8% year over year. Our estimate for the metric was $53.8 million.
Expenses & EBITDA
During the quarter, total expenses increased 10.1% year over year to $1,092 million from $992 million reported in the year-ago quarter. Our estimate for the metric was $991 million.
Adjusted EBITDA amounted to $186 million compared with $239 million reported in the prior-year quarter. The company anticipates a $24 million negative impact on Adjusted EBITDA from the Maui wildfires.
Balance Sheet
As of Dec 31, 2023, the company’s cash and cash equivalents were $248 million compared with $524 million as of Dec 31, 2022.
At the end of the fourth quarter, the company had $3 billion of corporate debt and $2.1 billion of non-recourse debt related to its securitized notes receivable.
2023 Highlights
Total revenues in 2023 amounted to $4,727 million compared with $4,656 million in 2022.
Adjusted EBITDA totaled $761 million compared with $966 million a year ago.
Adjusted EPS came in at $7.83 compared with $10.26 reported in the previous year.
2024 Outlook
For 2024, the company anticipates contract sales in the range of $1,880-$1,930 million compared with $1,772 million in 2023. Adjusted free cash flow is projected in the range of $400-$450 million. Adjusted EBITDA is expected to be between $760 million and $800 million compared with $761 million in the prior year. Adjusted fully diluted EPS for 2024 are expected to be between $7.65 and $8.35.
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.
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