Marriott Vacations Worldwide (VAC) Misses Q4 EPS by 15c; Provides FY EPS Guidance

Marriott Vacations Worldwide (NYSE: VAC) reported Q4 EPS of $2.43, $0.15 worse than the analyst estimate of $2.58. Revenue for the quarter came in at $1.15 billion versus the consensus estimate of $1.14 billion.

Fourth Quarter 2019 Results

• Consolidated vacation ownership contract sales increased 10% to $394 million driven by 9% VPG growth.
• Net income attributable to common shareholders was $74 million, or $1.71 per fully diluted share ("EPS"), compared to net income attributable to common shareholders of $44 million, or $0.91 per fully diluted share, in the fourth quarter of 2018.
• Adjusted net income attributable to common shareholders increased 47% to $105 million and Adjusted fully diluted EPS increased 63% to $2.43.
• Adjusted EBITDA increased 15% to $207 million in the fourth quarter of 2019.
• The company estimates that Hurricane Dorian (the \"Hurricane\") negatively impacted its fourth quarter Adjusted EBITDA by $3 million.
• The company completed a $90 million note securitization in the fourth quarter, consisting primarily of Asia-Pacific notes, generating proceeds of $65 million.
  • The company also closed on the sale of excess parcels in Cancun, Mexico and Avon, Colorado for proceeds of $62 million as part of its strategic decision to reduce holdings in markets where it has excess supply.
• The company finalized a long-term license agreement with Hyatt.
• The company repurchased nearly 1.1 million shares of its common stock for $123 million at an average price per share of $115.48.

"I am very pleased with how we ended the year, growing contract sales by 10% in the fourth quarter and Adjusted EBITDA by 15%, once again illustrating the strength and resilience of our business model. We grew VPG by 9% in the fourth quarter, including 12% growth at our Legacy-ILG sales centers, as we continue to narrow the gap with Legacy-MVW," said Stephen P. Weisz, president and chief executive officer. "The ILG integration continues to go well and we expect to achieve at least $95 million of run-rate synergies by the end of 2020, well on our way towards achieving at least $125 million in run-rate savings by the end of 2021. As a result, 2020 is shaping up to be another great year for Marriott Vacations Worldwide, with estimated contract sales growth of 7% to 11% and Adjusted EBITDA growth of 8% to 13%."

GUIDANCE:

Marriott Vacations Worldwide sees FY2020 EPS of $9.01-$9.72, versus the consensus of $9.08.

For earnings history and earnings-related data on Marriott Vacations Worldwide (VAC) click here.

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