On July 31, 2024, Marriott International Inc (MAR, Financial) released its 8-K filing for the second quarter of 2024, showcasing a solid performance that surpassed analyst expectations. The company, which operates 1.6 million rooms across roughly 30 brands, reported significant growth in key financial metrics.
Company Overview
Marriott International Inc (MAR, Financial) is a global leader in the hospitality industry, managing and franchising a vast portfolio of hotels and related lodging facilities. The company operates approximately 1.6 million rooms across nearly 9,000 properties worldwide. Its brand portfolio includes well-known names such as Marriott, Courtyard, and Sheraton, as well as newer lifestyle brands like Autograph, Tribute, Moxy, Aloft, and Element. Managed and franchised properties represent 97% of Marriott's total rooms, with North America accounting for 63% of the total.
Performance and Challenges
Marriott International Inc (MAR, Financial) reported a 4.9% increase in comparable systemwide constant dollar RevPAR (Revenue Per Available Room) worldwide, with a 3.9% increase in the U.S. & Canada and a 7.4% increase in international markets compared to the same quarter last year. This growth is indicative of the continued prioritization of travel by consumers. However, the company faced challenges in Greater China, which impacted incentive management fees due to a weaker operating environment.
Financial Achievements
Marriott's financial achievements in the second quarter of 2024 were noteworthy. The company reported diluted earnings per share (EPS) of $2.69, surpassing the analyst estimate of $2.46. Adjusted diluted EPS came in at $2.50, compared to $2.26 in the same quarter last year. Reported net income totaled $772 million, up from $726 million in the year-ago quarter, while adjusted net income reached $716 million, compared to $690 million in Q2 2023. Adjusted EBITDA also saw a significant increase, totaling $1,324 million, up from $1,219 million in the previous year.
Key Financial Metrics
Marriott's income statement revealed a robust performance, with base management and franchise fees totaling $1,148 million, a 9% increase from the previous year. Non-RevPAR-related franchise fees also saw growth, reaching $234 million, driven by a 10% increase in co-branded credit card fees and higher residential branding fees. The company's operating income for the quarter was $1,195 million, compared to $1,096 million in Q2 2023.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Reported Diluted EPS | $2.69 | $2.38 |
| Adjusted Diluted EPS | $2.50 | $2.26 |
| Reported Net Income | $772 million | $726 million |
| Adjusted Net Income | $716 million | $690 million |
| Adjusted EBITDA | $1,324 million | $1,219 million |
Commentary and Analysis
"Marriott reported strong second quarter results, with net rooms up 6 percent year over year and worldwide RevPAR growth of nearly 5 percent, as consumers continued to prioritize travel," said Anthony Capuano, President and Chief Executive Officer.
Marriott's performance in the second quarter of 2024 underscores its resilience and ability to capitalize on the ongoing recovery in the travel and leisure industry. The company's strategic focus on expanding its global portfolio and enhancing its loyalty program, Marriott Bonvoy, has contributed to its robust financial results. With a development pipeline of approximately 3,500 properties and more than 559,000 rooms, Marriott is well-positioned for continued growth.
Balance Sheet and Cash Flow
At the end of the second quarter, Marriott's total debt stood at $13.1 billion, with cash and equivalents totaling $0.3 billion. The company repurchased 4.1 million shares of common stock for $1.0 billion during the quarter and has returned $2.8 billion to shareholders year-to-date through July 29, 2024.
Outlook
Marriott has updated its outlook for the full year 2024, narrowing the RevPAR growth range due to a weaker operating environment in Greater China and marginally softer expectations in the U.S. & Canada. The company expects to return approximately $4.3 billion to shareholders in 2024 through share repurchases and dividends.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Marriott International Inc for further details.
