VAC Q1 2021 Earnings

Call Details

• Call Title: Marriott Vacations Q1 2021 Earnings Call
• Date: May 5, 2021 at 12:30 PM UTC
• Management Team:
  • Neal Goldner (Vice President, Investor Relations)
  • Stephen Weisz (Chief Executive Officer)
  • John Geller (President and Chief Financial Officer)

Call Summary

Financial Performance

• Contract sales increased 27% sequentially in Q1 2021 compared to Q4 2020.
• Volume-based guarantees (VBGs) increased 21% sequentially in the quarter.
• Vacation ownership adjusted EBITDA in the segment declined $5M sequentially to $68M, excluding reportability adjustments.
• Total adjusted EBITDA for the quarter was $69M after overcoming $26M of negative revenue reportability.
• Rental revenues increased 29% sequentially, and transient rate increased 14% sequentially, resulting in a $5M sequential bottom-line improvement in rentals.
• Interval exchange transactions were up 27% sequentially and average revenue per member increased 29% sequentially in Q1 in the exchange and third-party management segment.
• Delinquency rates improved across Marriott brands and were below both prior year and 2019 levels as of the quarter.

Guidance

• Second quarter contract sales are expected to be in the range of $320M to $340M, which implies around 45% sequential growth at the midpoint versus Q1.
• Development profit is expected to increase $40M to $50M sequentially in Q2 after roughly $10M to $15M of negative reportability.
• Rental profit is expected to improve by $20M to $25M sequentially in Q2 due to higher occupancies and transient rate.
• Occupancies and tours are projected to grow sequentially in the second quarter compared to Q1.
• Adjusted EBITDA in the exchange and third-party management business could be down slightly sequentially due to seasonality after Q1's pent-up demand benefit.
• Corporate G&A excluding share-based compensation is expected to be up roughly $10M to $15M sequentially in Q2 due to normalized spend and inclusion of wealth G&A.