On August 7, 2024, Sunstone Hotel Investors Inc (SHO, Financial) released its 8-K filing for the second quarter ended June 30, 2024. Sunstone Hotel Investors Inc is a real estate investment trust that acquires, owns, manages, and renovates full-service and select-service hotel properties across various states in the United States. The company's portfolio consists of upper upscale and luxury hotels located in convention, resort destination, and urban markets, with the majority of its hotels operating under brands owned by Marriott, Hilton, Hyatt, Four Seasons, or Montage.
Performance Overview
Sunstone Hotel Investors Inc reported a net income of $26.1 million for Q2 2024, a significant decrease from $43.1 million in Q2 2023, representing a 39.3% decline. The income attributable to common stockholders per diluted share also fell to $0.11 from $0.19, a 42.1% drop. Revenue for the quarter was $247.5 million, down from $276.1 million in the same period last year.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Income | $26.1 million | $43.1 million | -39.3% |
| EPS (Diluted) | $0.11 | $0.19 | -42.1% |
| Revenue | $247.5 million | $276.1 million | -10.4% |
| RevPAR | $232.59 | $237.37 | -2.0% |
| Occupancy | 72.1% | 74.3% | -220 bps |
| Average Daily Rate | $322.60 | $319.48 | 1.0% |
Challenges and Achievements
Despite the challenges, Sunstone Hotel Investors Inc managed to deliver stronger out-of-room spend and drive efficiencies and cost reductions across its portfolio. Bryan A. Giglia, Chief Executive Officer, stated,
“We generated second quarter earnings that were consistent with our expectations despite less robust RevPAR growth, as we were able to deliver stronger out-of-room spend and were successful in driving efficiencies and cost reductions across our portfolio.”
However, the company faced slower recovery in Maui, which impacted revenue growth and earnings expectations. The renovation and rebranding of Marriott Long Beach Downtown and the transformation of Andaz Miami Beach are expected to contribute to future earnings growth.
Financial Statements and Metrics
From the income statement, total revenues for Q2 2024 were $247.5 million, down from $276.1 million in Q2 2023. Operating expenses also decreased to $211.9 million from $227.7 million. The balance sheet showed total assets of $3.15 billion and total liabilities of $984.8 million as of June 30, 2024. The company had $234.0 million in cash and cash equivalents, including restricted cash of $74.9 million.
Stock Repurchase and Dividend Update
Sunstone Hotel Investors Inc repurchased 698,043 shares of its common stock at an average purchase price of $9.90 per share, totaling $6.9 million. The company also declared a cash dividend of $0.09 per share of its common stock, payable on October 15, 2024, to stockholders of record as of September 30, 2024.
Outlook
The company updated its full-year 2024 guidance, reflecting the slower recovery in Maui and the completion of renovation work at Marriott Long Beach Downtown. The updated guidance includes a net income range of $55 million to $65 million and Adjusted EBITDAre of $242 million to $252 million.
For more detailed financial information, readers can refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Sunstone Hotel Investors Inc for further details.
