MAR Q3 2019 Earnings

Call Details

• Call Title: Marriott International Q3 2019 Earnings Call
• Date: November 5, 2019 at 4:00 PM UTC
• Management Team:
  • Arne Sorensen (President and Chief Executive Officer)
  • Leeny Oberg (Executive Vice President and Chief Financial Officer)
  • Laura Paugh (Senior Vice President, Investor Relations)
  • Betsy Dahm (Senior Director, Investor Relations)

Call Summary

Financial Performance

• Adjusted diluted earnings per share totaled $1.47 in Q3 and is presented as an adjusted (non-GAAP) measure.
• Global system-wide constant dollar RevPAR rose 1.5% in the third quarter year over year.
• North America RevPAR increased 1.3% in the quarter.
• Gross fee revenues totaled $955 million in Q3, representing a 2% increase over the prior year quarter.
• Owned, leased and other revenue net of expenses totaled $67 million in Q3, a $15 million decline versus prior year due largely to lower termination fees.
• Termination fees were $11 million in the quarter compared to $23 million in the prior year quarter.
• Adjusted EBITDA in Q3 was flat year-over-year after $15 million lower residential branding fees, $12 million lower termination fees, and $17 million lower incentive fees partially offset by rooms and RevPAR growth.
• Total fees from Hong Kong hotels declined by $3 million in Q3 and are estimated to decline by $5 million in Q4, with full-year 2019 Hong Kong fees expected to be roughly $30 million from a dozen hotels.

Guidance

• For Q4 2019, North America RevPAR is expected to increase 0% to 1% year-over-year.
• For Q4 2019, Asia Pacific RevPAR could be flat to down modestly, but excluding Hong Kong is expected to increase at a low single-digit rate.
• For Q4 2019, Europe RevPAR is expected to grow at a low- to mid-single-digit rate, Middle East and Africa should decline at a low single-digit rate, and Caribbean and Latin America should increase at a low single-digit rate.
• For Q4 2019, gross fee revenue is expected to total $960 million to $970 million, which is roughly $20 million lower at the midpoint than the prior guidance due to more modest RevPAR growth, Hong Kong impact, and unfavorable FX.
• For Q4 2019, adjusted EBITDA is expected to total $898 million to $913 million, which represents a 4% to 6% increase over prior-year quarter.
• For Q4 2019, adjusted diluted EPS is expected to be $1.44 to $1.47, and the adjusted tax rate is expected to be 25% for the quarter.
• For full-year 2019, adjusted EBITDA is expected to total $3.572 billion to $3.587 billion, a 3% increase over prior year, and full-year diluted EPS is expected to be $5.87 to $5.90.