Marriott Vacations Worldwide Corporation VAC reported first-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line increased year over year, while the bottom line declined from the prior-year quarter’s figure.
Following the results, the company’s shares rose 8.1% in the after-hours trading session yesterday. Positive investor sentiments were witnessed as VAC provided a better-than-expected earnings outlook for 2025.
VAC’s Q1 Earnings & Revenue Discussion
Adjusted earnings per share (EPS) of $1.66 surpassed the Zacks Consensus Estimate of $1.56 by 6.4%. In the year-ago quarter, it reported an adjusted EPS of $1.80. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Marriott Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Marriott Vacations Worldwide Corporation Price, Consensus and EPS Surprise
Quarterly revenues of $1.2 billion missed the consensus mark of $1.22 billion by 1.9%. The top line increased 0.4% on a year-over-year basis.
Segmental Performances of Marriott Vacations
Vacation Ownership: The segment’s revenues (excluding cost reimbursements) totaled $757 million, up from $730 million reported in the prior-year quarter.
Vacation Ownership total contract sales fell 2% year over year to $420 million. The downside was primarily due to a lower volume per guest, with nearly half of the drop attributed to a greater proportion of first-time buyers. The decline was partially mitigated by an increase in the number of year-over-year tours.
The segment’s adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $221 million, up 4% from $213 million in the year-ago quarter. The upside was backed by higher profits from development, resort management and financing activities. Adjusted EBITDA margin came in at 29.2%, flat year over year.
Exchange & Third-Party Management: Segmental revenues (excluding cost reimbursements) of $56 million declined 9% year over year from $63 million.
Total active interval international members were down 2% year over year to 1.54 million. Average revenue per member declined 4% on a year-over-year basis to $39.94.
Adjusted EBITDA was $28 million, down 13% year over year. The segment’s adjusted EBITDA margin contracted 230 bps year over year to 49%.
VAC’s Q1 Corporate & Other Results
During the first quarter, general and administrative expenses totaled $61 million, compared with $63 million reported in the prior-year quarter. Our estimate was $48.8 million.
Total expenses during the quarter increased 1.2% year over year to $1.07 billion. We expected the metric to be $1.06 billion.
Adjusted EBITDA amounted to $192 million, up 3% year over year from $187 million. Our model predicted the metric to be $186.3 million.
Balance Sheet of VAC
As of March 31, 2025, Marriott Vacations’ cash and cash equivalents were $196 million compared with $197 million as of Dec. 31, 2024.
At the end of the first quarter, the company had $3 billion of corporate debt and $2 billion of non-recourse debt related to its securitized notes receivable.
2025 Outlook for Marriott Vacations
Management anticipates contract sales to be in the range of $1.74-$1.83 billion compared with the previous expectation of $1.85-$1.925 billion. Adjusted EBITDA is now expected to be between $750 million and $780 million.
In 2025, the company expects adjusted income to be in the range of $250 to $280 million. Adjusted EPS is anticipated to be between $6.40 and $7.10, up from the prior expectation of $6.30 and $7.00.
The company expects adjusted free cash flow to be in the range of $270-$330 million compared with the prior expectation of $290-$350 million.
VAC’s Zacks Rank
Marriott Vacations currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Consumer Discretionary Releases
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