Core Insights - Marriott International, Inc. demonstrates resilience in performance despite macroeconomic uncertainties and changing travel perceptions [1] - The company's diversified business portfolio and improved metrics are identified as core strengths [1] - High financial leverage poses a potential concern for the company [1] Company Performance - Marriott has managed to deliver decent performance amid challenging economic conditions [1] - The company benefits from a well-diversified business model, which contributes to its stability [1] Financial Considerations - The company must remain cautious regarding its high financial leverage, which could impact future performance [1]

Group 1 - Marriott International, Inc. reported mixed Q1 '25 results, with lowered guidance indicating potential future declines in growth numbers [1] - The expectation is that the worst financial performance is yet to come for the company [1] Group 2 - The analysis suggests a long-term investment horizon of 5-10 years, focusing on a balanced portfolio of growth, value, and dividend-paying stocks [1]

Revenue Performance - In Q1 2025, worldwide RevPAR increased by 4.1%, driven by ADR growth of 2.9% and occupancy improvement of 0.7 percentage points compared to Q1 2024[51]. - In the U.S. & Canada, RevPAR rose by 3.3% in Q1 2025, primarily due to strong demand from group customers[52]. - Internationally, RevPAR grew by 5.9% in Q1 2025, with APEC showing the highest growth at 10.9%[53]. - In Greater China, RevPAR decreased by 1.6% in Q1 2025, primarily due to a 2.7% decline in ADR amid lower domestic demand[53]. Property and Development - The total number of properties increased to 9,463 with 1,718,542 rooms by the end of Q1 2025, reflecting a net addition of approximately 12,200 rooms[56]. - The development pipeline includes approximately 3,800 properties and over 587,000 rooms, with 42% under construction or conversion[58]. - The company expects full-year 2025 net rooms growth to approach 5%, including the citizenM brand acquisition[58]. Revenue Breakdown - Fee revenues for Q1 2025 totaled $1,275 million, a 5% increase from $1,210 million in Q1 2024, with base management fees rising by 4%[64]. - Franchise fees increased by 8% to $746 million in Q1 2025, attributed to higher RevPAR and unit growth[65]. - Owned, leased, and other revenue reached $361 million in Q1 2025, a 1% increase from $357 million in Q1 2024[66]. - Cost reimbursement revenue increased by $222 million, or 5%, from $4,433 million in Q1 2024 to $4,655 million in Q1 2025[67]. - Segment net fee revenues in the U.S. & Canada rose by $24 million, or 4%, from $665 million in Q1 2024 to $689 million in Q1 2025[74]. Financial Position - Total cash, cash equivalents, and restricted cash increased by $121 million to $546 million at March 31, 2025, primarily due to long-term debt issuances[80]. - Capital and technology expenditures for Q1 2025 were $135 million, up from $109 million in Q1 2024, with full-year expectations between $1,355 million and $1,455 million[82]. - Share repurchases totaled 2.8 million shares for $0.8 billion in Q1 2025, with a year-to-date total of 3.9 million shares for $1.0 billion[84]. - Provision for income taxes decreased by $64 million, or 39%, from $163 million in Q1 2024 to $99 million in Q1 2025[72]. - Interest expense increased by $29 million, or 18%, from $163 million in Q1 2024 to $192 million in Q1 2025, primarily due to higher debt balances[71]. - Segment profit in the U.S. & Canada grew by $19 million, or 3%, from $625 million in Q1 2024 to $644 million in Q1 2025[74]. - The ratio of current assets to current liabilities was 0.5 to 1.0 at the end of Q1 2025, indicating significant borrowing capacity under the Credit Facility[81]. - The company expects to continue returning cash to stockholders through share repurchases and cash dividends[85].

Core Insights - Marriott International, Inc. reported first-quarter 2025 results with adjusted earnings exceeding estimates while revenues fell short, indicating a mixed performance despite year-over-year growth [1][3]. Financial Performance - Adjusted earnings per share (EPS) for Q1 2025 were $2.32, surpassing the Zacks Consensus Estimate of $2.27, and up from $2.13 in the prior-year quarter [3]. - Quarterly revenues reached $6,263 million, slightly below the consensus mark of $6,275 million, but represented a 5% increase year-over-year [3]. - Base management and franchise fees were $325 million and $746 million, respectively, reflecting year-over-year increases of 4% and 8% [4]. - Incentive management fees decreased by 2% to $204 million compared to $209 million in the prior-year quarter [4]. Operational Metrics - RevPAR for worldwide comparable system-wide properties increased by 5.2% year-over-year, supported by a 3.4% rise in average daily rate (ADR) and a 1.2% increase in occupancy [5]. - Comparable system-wide RevPAR in the Asia Pacific (excluding China) rose by 10.6% year-over-year, while Greater China experienced a decline of 2.1% [5][6]. - Total expenses decreased by 4% year-over-year to $5.31 billion, attributed to a decline in reimbursed expenses [6]. Development and Growth - The company achieved a record of over 34,000 room signings in Q1 2025, with nearly two-thirds in international markets, and conversions accounted for about one-third of new signings and openings [2]. - As of the end of Q1, Marriott's development pipeline included 3,808 hotels, with 1,447 properties and over 244,000 rooms under construction [9]. Future Outlook - For Q2 2025, management anticipates gross fee revenues between $1.38 billion and $1.39 billion, with adjusted EBITDA expected to range from $1.37 billion to $1.39 billion [10]. - The company projects worldwide system-wide RevPAR growth of 1.5-3.5% year-over-year for 2025, a revision from the previous estimate of 2-4% [10]. - For the full year 2025, gross fee revenues are expected to be between $5.37 billion and $5.48 billion, with adjusted EBITDA projected between $5.3 billion and $5.4 billion [11].

Core Insights - Marriott International reported $6.26 billion in revenue for Q1 2025, a year-over-year increase of 4.8% [1] - The EPS for the same period was $2.32, compared to $2.13 a year ago, with a surprise of +2.20% against the consensus estimate of $2.27 [1] Financial Performance Metrics - Revenue from owned/leased rooms was 14,312, slightly above the average estimate of 14,214 [4] - Managed rooms totaled 567,896, below the estimated 587,915 [4] - Franchised rooms reached 1,120,634, exceeding the estimate of 1,102,261 [4] - REVPAR growth rate was 4.1%, surpassing the average estimate of 2.7% [4] - Gross fee revenues were $1.28 billion, above the estimate of $1.25 billion, reflecting a +5.4% change year-over-year [4] - Net fee revenues were $1.25 billion, compared to the average estimate of $1.23 billion, marking a +5.1% year-over-year change [4] - Franchise fees amounted to $746 million, exceeding the estimate of $727.37 million, with an +8.4% year-over-year change [4] - Base management fees were $325 million, slightly above the average estimate of $319.23 million, representing a +3.8% change year-over-year [4] Stock Performance - Marriott shares returned +15.9% over the past month, outperforming the Zacks S&P 500 composite's +11.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Core Insights - Marriott International reported quarterly earnings of $2.32 per share, exceeding the Zacks Consensus Estimate of $2.27 per share, and showing an increase from $2.13 per share a year ago, representing an earnings surprise of 2.20% [1] - The company posted revenues of $6.26 billion for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.18%, but up from $5.98 billion year-over-year [2] - The stock has underperformed the market, losing about 11.4% since the beginning of the year compared to the S&P 500's decline of 3.9% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.72 on revenues of $6.75 billion, and for the current fiscal year, it is $10.12 on revenues of $26.42 billion [7] - The estimate revisions trend for Marriott is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Hotels and Motels industry is currently ranked in the top 37% of over 250 Zacks industries, suggesting that companies in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - Choice Hotels, a competitor in the same industry, is expected to report quarterly earnings of $1.38 per share, reflecting a year-over-year increase of 7.8% [9]

Financial Data and Key Metrics Changes - The company reported a 4.1% increase in global RevPAR for Q1 2025, exceeding the guidance range of 3% to 4% [5][10] - Average Daily Rate (ADR) increased by 3%, while occupancy rose by 1 percentage point [5][10] - Total gross fee revenues increased by 5% year over year to $1.28 billion [17] - Adjusted EBITDA totaled $1.22 billion, reflecting a 7% increase [18] Business Line Data and Key Metrics Changes - Group RevPAR rose by 8% globally, while business transient and leisure transient each grew by 2% globally [7][21] - The select service segment in the U.S. and Canada experienced softer growth, particularly in March [9][16] - International RevPAR increased nearly 6%, with APAC leading at an 11% rise [6][21] Market Data and Key Metrics Changes - RevPAR in the U.S. and Canada rose over 3%, with luxury and full-service hotels outperforming select service properties [5][6] - In EMEA, RevPAR rose by 6% due to strong transient demand [7] - Greater China saw a 2% decline in RevPAR, primarily due to a weaker macro environment [7][21] Company Strategy and Development Direction - The company is lowering its full-year RevPAR growth guidance by 50 basis points due to a cautious outlook in the U.S. and Canada [10][20] - Development activity remains robust, with a record 35% increase in signings year over year, totaling over 587,000 rooms in the pipeline [11][12] - The company is focused on enhancing efficiency and productivity, which contributed to a 6% decline in G&A expenses [18][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's agility and resilience amid heightened macroeconomic uncertainty [9][10] - The outlook for the second quarter anticipates a global RevPAR increase of 1.5% to 2.5% [20] - Management noted that demand trends internationally remain strong, except for Greater China, which is expected to be flat [21][22] Other Important Information - The company is expanding its portfolio with the addition of the CitizenM brand, which is expected to enhance growth opportunities [12][13] - The Marriott Bonvoy loyalty program reached nearly 237 million members, with member penetration at a record 68% of room nights globally [13][14] - Full-year adjusted diluted EPS is anticipated to be between $9.82 and $10.19, with an effective tax rate around 26% [26][27] Q&A Session Summary Question: Can you elaborate on the weaker select service performance? - Management noted that March saw softness in the U.S. and Canada, attributed to macroeconomic factors and the impact of government layoffs [32][34] Question: What is the owner's commitment to the CitizenM brand? - Management indicated strong enthusiasm from owners regarding the brand's positioning and growth potential [38] Question: How are developers reacting to current market conditions? - Developers remain optimistic about long-term opportunities despite short-term turbulence, with signings up significantly [42][44] Question: What is the outlook for inbound international travel to the U.S.? - The company reported a higher international mix in Q1 compared to the previous year, with strong demand from various countries [70][71] Question: How is the group booking pace trending into 2026? - Forward bookings for 2026 are tracking up about 7%, indicating positive momentum [77]

Financial Data and Key Metrics Changes - The company reported a global RevPAR increase of 4.1% year-over-year, exceeding the guidance range of 3% to 4% [6][19] - Average Daily Rate (ADR) increased by 3%, while occupancy rose by 1% [6] - Total gross fee revenues increased by 5% year-over-year to $1.28 billion [19] - Adjusted EBITDA totaled $1.22 billion, reflecting a 7% increase [20] Business Line Data and Key Metrics Changes - Group RevPAR rose by 8% globally, while business transient and leisure transient each grew by 2% globally [9] - The U.S. and Canada region saw a RevPAR increase of 2% year-over-year, impacted by a decline in government-related demand [18][19] - International RevPAR increased nearly 6%, with APAC leading at an 11% growth [7][9] Market Data and Key Metrics Changes - RevPAR in Greater China declined by 2% due to a weaker macro environment, although it was better than expected [9] - EMEA region experienced a 6% increase in RevPAR, driven by strong transient demand [9] - The U.S. government segment contributed to a 10% year-over-year decline in RevPAR for the U.S. and Canada region [18] Company Strategy and Development Direction - The company is lowering its full-year RevPAR growth guidance by 50 basis points due to a cautious outlook in the U.S. and Canada [11] - Development activity remains strong, with a record 35% increase in signings year-over-year, totaling over 587,000 rooms in the pipeline [12][13] - The company is focused on enhancing efficiency and productivity, which is expected to yield cost savings for owners and franchisees [20][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience despite macroeconomic uncertainties, noting solid demand across group and transient guests [6][10] - The outlook for the second quarter anticipates a global RevPAR increase of 1.5% to 2.5%, with full-year growth expected to be 1.5% to 3.5% [22][23] - Management highlighted the importance of the Marriott Bonvoy loyalty program, which had nearly 237 million members, contributing to strong customer engagement [14] Other Important Information - The company is undergoing a multi-year digital and technology transformation to enhance operational efficiency and customer experience [15] - The CitizenM transaction is expected to close in the latter half of the year, contributing to net rooms growth [20][29] Q&A Session Summary Question: Can you elaborate on the weaker select service performance? - Management noted that March saw softness in the U.S. and Canada, but preliminary April results showed improvement, excluding the impact of Easter [34][36] Question: What is the owner's commitment to the CitizenM brand? - Management indicated strong enthusiasm from owners regarding the CitizenM partnership, leveraging Marriott's extensive developer network for growth [40] Question: How are conversations with developers in the U.S. regarding full-service hotels? - Management reported that signings were up significantly, indicating long-term confidence among owners despite short-term uncertainties [44][46] Question: What is the outlook for inbound international travel to the U.S.? - Management highlighted a positive trend in international room nights, with a mix higher than the previous year, despite a decline from Canada [76][78] Question: How is the group booking pace trending into 2026? - Management reported a 7% increase in forward bookings for 2026, indicating strong demand [84] Question: What are the expectations for conversions in the current economic environment? - Management expressed optimism about conversion volumes remaining steady, supported by low new supply growth and strong demand for conversions [104][108]

Financial Performance - Reported diluted EPS for Q1 2025 was $2.39, an increase from $1.93 in Q1 2024, while adjusted diluted EPS was $2.32 compared to $2.13 in the prior year[12][13] - Net income for Q1 2025 totaled $665 million, an 18% increase from $564 million in Q1 2024[12] - Total revenues for the three months ended March 31, 2025, were $6,263 million, an increase of 5% compared to $5,977 million for the same period in 2024[32] - Basic earnings per share increased by 24% to $2.40 for the three months ended March 31, 2025, compared to $1.94 for the same period in 2024[32] - Adjusted net income for the three months ended March 31, 2025, was $645 million, a 4% increase from $620 million in the same period of 2024[35] - Operating income for the three months ended March 31, 2025, was $948 million, an 8% increase from $876 million in the same period of 2024[32] - Adjusted EBITDA for Q1 2025 was $1,217 million, a 7% increase from $1,142 million in Q1 2024[15] - Estimated net income excluding certain items for Q2 2025 is projected to be between $706 million and $721 million, compared to $721 million in Q2 2024[57] - Adjusted EBITDA for Q2 2025 is estimated to be between $1,370 million and $1,390 million, reflecting a 3% increase over Q2 2024[57] - Estimated net income excluding certain items for the full year 2025 is projected to be between $2,757 million and $2,860 million, compared to $2,860 million in 2024[59] - Adjusted EBITDA for the full year 2025 is estimated to be between $5,285 million and $5,425 million, representing a 6% increase over 2024[59] Room Growth and Development - The company added approximately 12,200 net rooms in Q1 2025, representing a 4.6% growth year-over-year[4] - Marriott's worldwide development pipeline at the end of Q1 2025 included approximately 3,808 properties and over 587,000 rooms, a 7.4% increase year-over-year[4][17] - The company expects full-year 2025 net rooms growth to approach 5%, assuming the acquisition of citizenM closes before year-end[6] - As of March 31, 2025, Marriott International has a total of 9,463 properties and 1,718,542 rooms worldwide[38] - The company reported a total of 1,981 managed properties worldwide, with a total of 567,896 rooms as of March 31, 2025[37] Shareholder Returns - The company repurchased 2.8 million shares for $0.8 billion in Q1 2025, returning over $1.2 billion to shareholders year-to-date through April 29[4][20] Loyalty Program - The loyalty program membership grew to nearly 237 million members by the end of March 2025[7] Revenue and Fees - Franchise fees increased by 8% to $746 million for the three months ended March 31, 2025, compared to $688 million in the same period of 2024[32] - Cost reimbursement revenue increased by 5% to $4,655 million for the three months ended March 31, 2025, compared to $4,433 million in the same period of 2024[32] Regional Performance - In Q1 2025, worldwide RevPAR increased by 4.1%, with U.S. & Canada growing by 3.3% and international markets by 5.9%[4] - RevPAR for JW Marriott increased by 5.5% to $267.85, with occupancy rising 2.2 percentage points to 73.0%[46] - The Ritz-Carlton's RevPAR grew by 8.0% to $412.33, and occupancy improved by 2.7 percentage points to 69.0%[46] - Average Daily Rate (ADR) for the Caribbean & Latin America region rose by 7.6% to $348.58, with RevPAR increasing by 10.8% to $244.14[50] - The Greater China region experienced a RevPAR decline of 2.1% to $77.23, with ADR decreasing by 3.1% to $120.13[50] - Occupancy rates in Asia Pacific excluding China improved by 1.7 percentage points to 71.3%, with RevPAR increasing by 10.6% to $133.23[50] - Marriott's overall RevPAR for the US & Canada increased by 5.1% to $181.75, with occupancy rising by 1.2 percentage points to 67.2%[46] - The average daily rate for the Composite US & Canada Luxury segment increased by 2.6% to $495.55, with RevPAR up by 5.7% to $349.69[46] - Marriott's occupancy rate for the Worldwide segment improved by 1.2 percentage points to 67.3%, with a RevPAR increase of 5.2% to $146.49[50] Future Outlook - The updated outlook for Q2 2025 anticipates RevPAR growth of 1.5% to 2.5% and full-year growth of 1.5% to 3.5%[22] - The company plans to acquire the citizenM brand, expected to occur in the second half of 2025[57] Expenses and Projections - Interest expense for the full year 2025 is expected to remain at $816 million, consistent with 2024[59] - Provision for income taxes for Q2 2025 is estimated at $264 million, compared to $269 million in Q2 2024[57] - Stock-based compensation for the full year 2025 is projected to be $220 million, consistent with previous periods[59] - Depreciation and amortization for the full year 2025 is expected to be $200 million, unchanged from 2024[59] Performance Metrics - The company emphasizes the importance of Adjusted EBITDA as a meaningful indicator of operating performance, allowing for period-over-period comparisons[65]

Core Insights - The article identifies the worst-performing stocks in May, highlighting the importance for traders to avoid potential downfalls [1] Group 1: Underperforming Stocks - Marriott International Inc (NASDAQ:MAR) has historically averaged a 2.6% loss in May, with only one gain in the last decade [2][3] - Walgreens Boots Alliance Inc (NASDAQ:WBA) has an average loss of 3.9% for May, with only two positive months out of ten [2][3] - The list includes 25 S&P 500 stocks that have underperformed in May over the past ten years [1] Group 2: Performance Data - MAR's average return in May is -1.62% with a median return of -2.57%, and it has a 10% chance of a positive return [3] - WBA's average return is -3.99% with a median return of -2.37%, showing a 20% chance of a positive return [3] - Other notable underperformers include APA (average return -4.98%), TSN (average return -3.59%), and DIS (average return -3.07%) [3] Group 3: Recent Stock Performance - MAR is currently trading at $248.70, down 0.3%, and has seen a 10.9% decline year-to-date [5] - WBA is trading flat at $10.97, with a significant year-over-year decline of 38.4% [6] - Both companies have shown disappointing post-earnings reactions, with MAR finishing lower in six of the last eight sessions following earnings reports [5]