Stock Story -
Vacation ownership company Marriott (NASDAQ:MAR) Vacations (NYSE:VAC) missed analysts' expectations in Q2 CY2024, with revenue down 3.2% year on year to $1.14 billion. It made a non-GAAP profit of $1.10 per share, down from its profit of $2.05 per share in the same quarter last year.
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Marriott Vacations (VAC) Q2 CY2024 Highlights:
- Revenue: $1.14 billion vs analyst estimates of $1.21 billion (5.9% miss)
- EPS (non-GAAP): $1.10 vs analyst expectations of $2.05 (46.3% miss)
- EPS (non-GAAP) Guidance for the full year is $6.18 at the midpoint, missing analysts' estimates by 20.3%
- Gross Margin (GAAP): 73.4%, down from 76.9% in the same quarter last year
- Market Capitalization: $3.07 billion
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 LinesHotels, 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 GrowthExamining a company's long-term performance can provide clues about its business quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Marriott Vacations grew its sales at a weak 3.7% compounded annual growth rate. This shows it failed to expand in any major way and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or emerging trend. Marriott Vacations's annualized revenue growth of 3.9% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.
This quarter, Marriott Vacations missed Wall Street's estimates and reported a rather uninspiring 3.2% year-on-year revenue decline, generating $1.14 billion of revenue. Looking ahead, Wall Street expects sales to grow 8.1% over the next 12 months, an acceleration from this quarter.
Operating Margin
in line with the same quarter last year. This indicates the company's overall cost structure has been relatively stable.
Key Takeaways from Marriott Vacations's Q2 Results We struggled to find many strong positives in these results. Its full-year earnings forecast missed and this quarter's revenue and EPS fell short of Wall Street's estimates. Overall, this quarter could have been better. The stock traded down 4.2% to $81 immediately following the results.
