On July 31, 2024, Marriott Vacations Worldwide Corp (VAC, Financial) released its 8-K filing detailing the financial performance for the second quarter of 2024. The company, a prominent player in the United States leisure industry, owns and manages a range of resorts and accommodation facilities under well-known trademarks such as Marriott Vacation Club, Grand Residences, and The Ritz-Carlton Destination Club.
Performance and Challenges
Marriott Vacations Worldwide Corp (VAC, Financial) reported a mixed performance for the second quarter of 2024. Consolidated Vacation Ownership contract sales declined by 1% year-over-year to $449 million. Excluding the impact of the Maui wildfires, contract sales increased by 3%. The company recorded a $70 million increase in its sales reserve, reflecting higher expected future defaults on its existing vacation ownership notes receivable portfolio. This adjustment significantly impacted the financial results, with net income attributable to common stockholders dropping to $37 million from $90 million in the prior year, and fully diluted earnings per share falling to $0.98.
Financial Achievements
Despite the challenges, Marriott Vacations Worldwide Corp (VAC, Financial) achieved notable financial milestones. The company reported that its resorts operated at 90% occupancy during the second quarter, with tours increasing by 5%. However, first-time buyer volume per guest (VPG) declined compared to the previous year, and the recovery in Maui was slower than anticipated. Adjusted net income attributable to common stockholders was $42 million, down from $90 million in the prior year, and adjusted fully diluted earnings per share was $1.10.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Revenues | $1,140 million | $1,178 million | (3%) |
| Net Income Attributable to Common Stockholders | $37 million | $90 million | (59%) |
| Adjusted EBITDA | $157 million | $222 million | (29%) |
| Adjusted Earnings Per Share - Diluted | $1.10 | $2.19 | (50%) |
Balance Sheet and Liquidity
Marriott Vacations Worldwide Corp (VAC, Financial) ended the quarter with $820 million in liquidity, including $206 million in cash and cash equivalents and $543 million of available capacity under its revolving corporate credit facility. The company had $3.1 billion of corporate debt and $2.1 billion of non-recourse debt related to its securitized vacation ownership notes receivable.
Commentary and Outlook
"We had a mixed second quarter, with rentals exceeding our expectations and lower VPGs negatively impacting our contract sales. In addition, we have not seen the necessary improvements in our loan delinquencies, so we increased our sales reserves to reflect higher expected defaults," said John Geller, president and chief executive officer.
Marriott Vacations Worldwide Corp (VAC, Financial) updated its full-year 2024 guidance, projecting contract sales between $1,790 million and $1,825 million, net income attributable to common stockholders between $195 million and $215 million, and adjusted EBITDA between $685 million and $715 million.
For more detailed financial information and analysis, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Marriott Vacations Worldwide Corp for further details.
