VAC Q3 2023 Earnings

Call Details

• Call Title: Marriott Vacations Q3 2023 Earnings Call
• Date: November 2, 2023 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

• Total company adjusted EBITDA would have declined to $174 million in the quarter, excluding the estimated impact of the Maui wildfires.
• Vacation ownership segment adjusted EBITDA would have decreased 24% year-over-year to $195 million in the quarter, excluding the estimated impact of Maui.
• Contract sales declined 4% year-over-year in the quarter, excluding an estimated $28 million impact from the Maui fires.
• At over $4,100, VPG was down 5% year-over-year in Q3, which improved from a 14% decline in Q2.
• Rental profit declined $13 million year-over-year primarily due to lower REVPAC in Orlando and mountain locations and higher inventory holding costs.
• Financing profit increased 3% year-over-year and resort management profit grew 8% year-over-year in the quarter.

Guidance

• Updated 2023 adjusted EBITDA guidance was narrowed to $745 million to $765 million, which includes an estimated $50 to $55 million impact from the Maui fires and a $49 million net decrease from the increased loan loss provision.
• Fourth quarter adjusted EBITDA is guided to $170 million to $190 million, which includes an estimated $26 to $31 million impact from the Maui wildfires.
• Full-year 2023 contract sales are expected to be $1.75 billion to $1.77 billion after an estimated $60 to $65 million impact from the Maui fires.
• Development margin for 2023 is expected to be around 27% after a 300 basis point reduction from the additional loan loss provision.
• Fourth quarter contract sales are guided to $425 million to $445 million after an estimated $32 to $37 million Maui impact.
• Adjusted free cash flow for 2023 is now expected to be $430 million to $460 million.