Marriott International ($MAR) has adjusted its full-year earnings outlook downwards as the hotel's third-quarter results did not meet market expectations. The company now anticipates adjusted earnings between $9.19 and $9.27 per share for 2024, a reduction from its previous guidance of $9.23 to $9.40.
Capital IQ's current consensus predicts a normalized EPS of $9.36. The stock saw a 2% decline in premarket trading. Despite the disappointing earnings forecast, Marriott maintains its projection for systemwide revenue per available room (revPAR) growth this year at 3% to 4%. The company's gross fee revenue is estimated to be between $5.13 billion and $5.15 billion, with the upper limit adjusted down from a prior forecast of $5.18 billion.
They expect net rooms growth of about 6.5%, a slight increase from the previous estimate of a 5.5% to 6% gain. For the September quarter, Marriott's adjusted EPS increased by 7% year over year to $2.26, missing analysts' estimates of $2.31. Overall revenues rose to $6.26 billion, up from $5.93 billion in the same quarter last year, aligning closely with Wall Street's expectations. Worldwide revPAR increased by 3% during the quarter, largely driven by a robust 5.4% rise in international markets, with Europe leading the way with a 9.5% year-over-year growth.
In contrast, the US and Canada saw a 2.1% rise in revPAR, while figures for China dropped by 7.9%. Chief Executive Anthony Capuano noted, "Group has remained the standout customer segment, with global group revPAR rising 10% during the quarter and projected to increase by 8% for the full year of 2024." He highlighted the continued growth in business transient revPAR, while leisure transient revPAR held steady compared to last year, maintaining a position significantly above pre-pandemic levels. During the quarter, Marriott added approximately 16,000 new rooms, bringing its global system total to nearly 9,100 properties and approximately 1.68 million rooms.
Capuano stated, "Given the breadth and depth of our portfolio and the significant benefits we provide to owners and franchisees, the demand for our brands remains robust." Looking ahead to the ongoing quarter, Marriott expects adjusted EPS to fall between $2.31 and $2.39, while analysts are anticipating $2.43.
Annual revPAR growth is projected to be between 2% and 3%. The company also forecasts gross fee revenue in the range of $1.29 billion to $1.31 billion. In terms of operational efficiency, Capuano remarked, "We have launched a comprehensive initiative to improve our effectiveness and efficiency company-wide.
As a result, we project this initiative will yield between $80 million and $90 million in annual general and administrative cost reductions starting in 2025.".