VAC Q1 2024 Earnings

Call Details

• Call Title: Marriott Vacations Q1 2024 Earnings Call
• Date: May 7, 2024 at 12:30 PM UTC
• Management Team:
  • Neal Goldner (Vice President, Investor Relations)
  • John Geller (President and Chief Executive Officer)
  • Jason Marino (Executive Vice President and Chief Financial Officer)

Call Summary

Financial Performance

• System-wide occupancy was 90% in Q1.
• Contract sales declined 1% year over year due to Maui and a difficult VPG comparison.
• Contract sales grew 3% year over year excluding Maui.
• Tours increased 4% year over year and first-time buyer tours grew 9%.
• Rental profit increased $12 million year-over-year driven by higher rental revenue and lower expenses.
• Adjusted EBITDA in the vacation ownership segment declined 7% year-over-year and segment margins were 29% in the quarter.
• Total company adjusted EBITDA declined 8% year-over-year.
• Diluted shares outstanding declined 5% year-over-year following repurchases over the last 12 months.

Guidance

• Full year adjusted EBITDA guidance remains unchanged at $760 million to $800 million.
• The company expects contract sales to grow 6% to 9% for the full year.
• Development margin is expected to be down a few points for the year, including in the second quarter.
• Financing profit is expected to be a headwind to growth this year due to higher securitized debt costs.
• Adjusted free cash flow is expected to be in the $400 million to $450 million range for the year.
• The company targets net debt to adjusted EBITDA of three times by the end of 2025.
• G&A expense is expected to be up slightly year-over-year.