Investors in Marriott Vacations Worldwide Corporation (VAC) need to pay close attention to the stock based on moves in the options market lately. That is because the Jul 07, 2025 $50.00 Call had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or t ...

Company Overview - Marriott Vacations Worldwide (VAC) shares have increased by approximately 1.1% since the last earnings report, underperforming the S&P 500 [1] - Recent estimates for the company have trended downward, with a consensus estimate shift of 5.78% [2] Performance Metrics - The company has a subpar Growth Score of D, but a strong Momentum Score of A, and a Value Score of A, placing it in the top quintile for value investment strategy [3] - The aggregate VGM Score for Marriott Vacations Worldwide is B, which is relevant for investors not focused on a single strategy [3] Outlook - The overall trend of estimates for Marriott Vacations Worldwide has been downward, but the magnitude of these revisions appears promising [4] - The company holds a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the upcoming months [4] Industry Comparison - Marriott Vacations Worldwide is part of the Zacks Leisure and Recreation Services industry, where Royal Caribbean (RCL) has seen a significant gain of 16.6% over the past month [5] - Royal Caribbean reported revenues of $4 billion for the last quarter, reflecting a year-over-year increase of 7.3%, with EPS rising from $1.77 to $2.71 [5] - Royal Caribbean is projected to post earnings of $4.04 per share for the current quarter, indicating a year-over-year change of 25.9% [6]

Summary of Marriott Vacations Worldwide (VAC) FY Conference Call Company Overview - **Company**: Marriott Vacations Worldwide (VAC) - **Date of Conference**: June 03, 2025 Key Industry Insights - **Cyclicality of Timeshare Business**: Timeshare purchases are discretionary but viewed as long-term investments in future vacations. Despite macroeconomic volatility, the company reported only a 2% decline in vacation purchase growth (VPG) for first-time buyers and owners, indicating continued consumer interest in long-term vacation investments [2][12] - **Post-COVID Consumer Behavior**: There is a notable shift towards prioritizing experiences over material goods, leading to high occupancy rates of over 90% across vacation ownership resorts [4] Financial Performance and Business Model - **Recurring Revenue**: Approximately 40% of EBITDA is recurring, with growth expected in financing profits and management fees despite higher securitization rates [6] - **Sales and Promotions**: The company has implemented promotional incentives to drive demand, particularly for first-time buyers, resulting in an increase in their mix of first-time buyers compared to competitors [7][8] - **Occupancy Rates**: The company maintains high occupancy rates, with resorts expected to remain over 90% occupied throughout the year [4] Consumer Demographics and Trends - **Target Demographics**: The average household income of customers is around $275,000, with a self-reported net worth of approximately $1 million. About 60% of first-time buyers are from the millennial and Gen X demographics [16][15] - **Product Evolution**: The timeshare product has evolved to include more flexible options, appealing to younger consumers and families, which helps maintain relevance across generations [13][14] Operational Efficiency and Cost Management - **Modernization Initiatives**: The company is targeting an incremental EBITDA of $150 million to $200 million through modernization efforts, with a focus on improving operational efficiency and agility [29] - **Cost of Vacation Ownership Interest (VOI)**: The cost of VOI has been managed through a mix of repurchased inventory and new inventory, with expectations of higher product costs in the future [31][34] Credit and Delinquency Management - **Delinquency Rates**: Delinquency rates have improved due to proactive outreach and technology enhancements, with maintenance fee increases kept to a low 3% for 2025 [38][39] - **FICO Scores**: The average FICO score for originations is approximately 735, reflecting a focus on higher-quality credit risk since the acquisition of ILG in 2018 [42] Capital Allocation and Free Cash Flow - **Free Cash Flow Conversion**: Historically, free cash flow conversion has been above 50%, but is expected to be in the low 40% range this year due to higher inventory spending [49] - **Asset Sales**: The company is actively selling non-core assets, such as the Sheraton Kauai Hotel, to focus on its core business and improve cash flow [55] Conclusion Marriott Vacations Worldwide is navigating a complex market environment with a focus on enhancing customer experience, maintaining high occupancy rates, and improving operational efficiencies. The company is well-positioned to leverage its strong brand and evolving product offerings to attract a diverse customer base while managing costs and improving financial performance.

Marriott Vacations Worldwide Corporation VAC reported better-than-expected first-quarter adjusted EPS results and raised its FY25 adjusted EPS guidance on Thursday.Marriott Vacations reported quarterly earnings of $1.66 per share which beat the analyst consensus estimate of $1.49 per share. The company reported quarterly sales of $1.20 billion which missed the analyst consensus estimate of $1.21 billion.“We had a strong first quarter growing first time buyer sales and Adjusted EBITDA, illustrating the power ...

Financial Data and Key Metrics Changes - Total company revenue increased year over year, enabling a 3% higher adjusted EBITDA [14][18] - Total company adjusted EBITDA increased 3% to $192 million, with margins remaining strong at 23% [18] - Total company contract sales declined 2% compared to the prior year, with first-time buyer sales increasing 6% year over year [15][20] Business Line Data and Key Metrics Changes - Development profit increased 4% compared to the prior year, with development margin increasing 70 basis points [17] - Rental profit declined 10% year over year to $46 million, impacted by higher unsold maintenance fees and other variable costs [17] - Financing profit increased 6%, driven by higher interest income [17] Market Data and Key Metrics Changes - The company experienced a 1.5% increase in tours, but VPG was 4% lower due to a higher mix of first-time buyer sales [14] - Owner sales declined year over year driven by lower arrivals and slightly lower VPG [14] - Delinquencies improved 60 basis points year over year and were lower again in April [16] Company Strategy and Development Direction - The company is focused on modernization initiatives to accelerate revenue growth, reduce costs, and enhance operational efficiencies, targeting $150 million to $200 million in run rate benefits by the end of 2026 [6][20] - A comprehensive digital strategy is being implemented to increase product utilization and lower costs, including the use of AI-powered phone agents [9][10] - The company plans to dispose of $150 million to $200 million of non-core assets over the next few years [22] Management's Comments on Operating Environment and Future Outlook - Management noted that despite a volatile economic environment, consumer demand remains strong and forward-looking KPIs are healthy [12] - The company is adjusting its full-year sales guidance due to lower contract sales experienced at the start of the year [12][20] - Management expressed confidence in the long-term health of the business, citing strong margins and positive free cash flow [12][78] Other Important Information - The company ended the quarter with $865 million in liquidity and no corporate debt maturities until early 2026 [18] - Share buybacks increased, with $91 million returned to shareholders in the first quarter [19] - The company is actively reducing costs and expects to generate $40 million to $50 million in savings this year [21] Q&A Session Summary Question: Can you talk about contract sales in March or April? - Management confirmed contract sales were down about 4% in March and similar in April, but saw improvements in VPGs and contract sales for first-time buyers in April [27][28] Question: Can you elaborate on the cost savings mentioned? - Management indicated that the expected savings from modernization initiatives have increased to $35 million for the year, driven by adjustments in product costs and inventory mix [29][31] Question: What is the current status of inventory availability? - Management stated that they are in a good position regarding inventory, with a mix of products available across all brands [45][46] Question: How do you view share repurchases going forward? - Management expressed that share prices are undervalued and indicated a balance between share repurchases and getting back to target leverage [47][49] Question: What initiatives are being taken to drive tour flow? - Management highlighted the use of data and analytics to target the right customers and improve package offerings [52][53] Question: Can you discuss the non-core asset sales? - Management mentioned plans to sell a hotel in Kauai and a retail parcel in Waikiki, among other smaller assets [57][58] Question: What are the expectations for owner growth? - Management aims to drive a higher mix of first-time buyers while balancing VPGs, expecting net owner growth to be positive [64][66]

Financial Data and Key Metrics Changes - Total company revenue increased year over year, enabling a 3% higher adjusted EBITDA [13][22] - Adjusted EBITDA reached $192 million, with margins remaining strong at 23% [15][22] - Total company contract sales declined 2% compared to the prior year, with first-time buyer sales increasing 6% year over year [14][22] Business Line Data and Key Metrics Changes - Development profit increased 4% compared to the prior year, with development margin increasing by 70 basis points [15] - Total company rental profit declined 10% year over year to $46 million, impacted by higher unsold maintenance fees and other variable costs [15] - Financing profit increased 6%, driven by higher interest income [15] Market Data and Key Metrics Changes - Resort occupancy ran over 90% in the first quarter, with strong forward bookings [6] - Nearly 70% of Marriott Vacations points reservations for stays at resorts were booked online, a significant increase from previous years [10] - Loan and maintenance fee delinquencies improved year over year, with a 60 basis point decrease [14] Company Strategy and Development Direction - The company is focused on modernization initiatives to accelerate revenue growth, reduce costs, and enhance operational efficiencies, targeting $150 million to $200 million in run rate benefits by the end of 2026 [5][12] - A comprehensive digital strategy is being implemented to increase product utilization and expand e-commerce [8] - The company plans to generate $75 million to $100 million of adjusted EBITDA benefits from revenue initiatives [20] Management's Comments on Operating Environment and Future Outlook - Management noted the current economic environment is volatile but consumer demand remains strong [12] - The company is confident in its updated contract sales guidance, expecting to see improvements in owner arrivals as the year progresses [7][12] - Management emphasized the importance of high-margin recurring revenue streams, which contribute around 40% of adjusted EBITDA [12][22] Other Important Information - The company ended the quarter with $865 million in liquidity and no corporate debt maturities until early 2026 [16] - Share buybacks increased, with $91 million returned to shareholders in the first quarter [18] - The company is actively working on disposing of non-core assets, including the Sheraton Kauai Resort [21] Q&A Session Summary Question: Can you talk about contract sales in March or April? - Contract sales were down about 4% in March and similar in April, but there was an increase in VPGs and contract sales for first-time buyers in April [26][27] Question: Can you elaborate on the cost savings mentioned? - The company expects $35 million in savings from modernization initiatives, with product costs being better than initially anticipated [28][30] Question: What is being done to drive tour flow? - The company is focused on driving tour flow through various initiatives and incentives, enhancing the value proposition for consumers [36] Question: Can you explain the inventory mix adjustment? - The inventory mix is being adjusted by selling different products and modulating the inventory to drive costs down [39][40] Question: How is the availability of new inventory? - The company is in a good position regarding inventory availability across all brands, with ongoing upgrades and buybacks [43] Question: What is the expectation for share repurchases going forward? - The company plans to balance share repurchases with getting back to target leverage, viewing shares as undervalued [46][48] Question: Can you discuss the non-core asset sales? - The company is working on selling excess assets, including a hotel in Kauai and retail space in Waikiki [56][57] Question: What is the trend in owner growth? - The company aims to drive owner growth above 35%, focusing on first-time buyers for long-term health [62][64]

Part I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited interim consolidated financial statements for Q1 2025, covering income, comprehensive income, balance sheets, cash flows, and stockholders' equity [Interim Consolidated Statements of Income](index=3&type=section&id=Interim%20Consolidated%20Statements%20of%20Income) Q1 2025 total revenues reached $1,200 million, with net income attributable to common stockholders rising to $56 million, or $1.46 per diluted share Q1 2025 vs Q1 2024 Income Statement Highlights | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total Revenues** | $1,200 million | $1,195 million | | **Total Expenses** | $1,071 million | $1,058 million | | **Income Before Income Taxes** | $102 million | $81 million | | **Net Income** | $57 million | $46 million | | **Net Income Attributable to Common Stockholders** | $56 million | $47 million | | **Diluted Earnings Per Share** | $1.46 | $1.22 | | **Cash Dividends Declared Per Share** | $0.79 | $0.76 | [Interim Consolidated Statements of Comprehensive Income](index=4&type=section&id=Interim%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income attributable to common stockholders was $55 million for Q1 2025, primarily driven by net income Q1 2025 vs Q1 2024 Comprehensive Income | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net Income** | $57 million | $46 million | | **Other Comprehensive Loss, Net of Tax** | $(1) million | $(1) million | | **Comprehensive Income Attributable to Common Stockholders** | $55 million | $46 million | [Interim Consolidated Balance Sheets](index=5&type=section&id=Interim%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $9,882 million, total liabilities $7,447 million, and total MVW stockholders' equity $2,435 million Balance Sheet Summary | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $9,882 million | $9,808 million | | Vacation ownership notes receivable, net | $2,446 million | $2,440 million | | Goodwill | $3,117 million | $3,117 million | | **Total Liabilities** | $7,447 million | $7,367 million | | Securitized debt, net | $2,147 million | $2,136 million | | Debt, net | $3,151 million | $3,089 million | | **Total MVW Stockholders' Equity** | $2,435 million | $2,442 million | [Interim Consolidated Statements of Cash Flows](index=6&type=section&id=Interim%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash provided by operating activities was $8 million, resulting in a $41 million decrease in cash, cash equivalents, and restricted cash Q1 2025 vs Q1 2024 Cash Flow Summary | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $8 million | $3 million | | **Net cash used in investing activities** | $(18) million | $(69) million | | **Net cash (used in) provided by financing activities** | $(32) million | $43 million | | **Change in cash, cash equivalents and restricted cash** | $(41) million | $(24) million | [Interim Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Interim%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total MVW stockholders' equity decreased to $2,435 million due to common stock repurchases and dividend payments, partially offset by net income Changes in Stockholders' Equity (Q1 2025) | Description | Amount (in millions) | | :--- | :--- | | **Balance at December 31, 2024** | **$2,442** | | Net income | $56 | | Repurchase of common stock | $(36) | | Dividends | $(27) | | Other (Share-based comp, currency adjustments) | $(10) | | **Balance at March 31, 2025** | **$2,435** | [Notes to Financial Statements](index=9&type=section&id=Interim%20Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed disclosures supporting financial statements, covering accounting policies, revenue, debt, equity, and business segments [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, highlighting a 2% decrease in contract sales, a 3% increase in Adjusted EBITDA, and a new Strategic Business Operations initiative - In Q4 2024, the company launched a Strategic Business Operations office to accelerate growth and drive efficiencies, targeting **$150 million** to **$200 million** of run-rate benefits by the end of 2026. Expected one-time cash costs are approximately **$100 million** in each of 2025 and 2026[157](index=157&type=chunk) Q1 2025 Key Operating Statistics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | **Consolidated contract sales** | $420 million | $428 million | (2%) | | **VPG** | $3,979 | $4,129 | (4%) | | **Tours** | 97,998 | 96,579 | 1% | | **Total active members (end of period)** | 1.538 million | 1.566 million | (2%) | Adjusted EBITDA Reconciliation Summary | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net income attributable to common stockholders** | $56 million | $47 million | | **EBITDA** | $179 million | $160 million | | **Adjusted EBITDA** | $192 million | $187 million | | **Adjusted EBITDA Margin** | 23.2% | 23.2% | - As of March 31, 2025, the company's corporate debt, net of cash and equivalents, to Adjusted EBITDA ratio was **4.1**, which is above its targeted range of **2.5** to **3.0**[216](index=216&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk exposure remains largely unchanged, with 67% of corporate debt fixed-rate and a 100 basis point rate increase impacting annual cash interest by $8 million - At March 31, 2025, **33%** (approximately **$984 million**) of the company's corporate debt had a variable interest rate[243](index=243&type=chunk) - A 100 basis point increase in the underlying benchmark rate on variable-rate debt would increase annual cash interest by approximately **$8 million**[243](index=243&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[245](index=245&type=chunk) - No material changes were made to the company's internal control over financial reporting during the first quarter of 2025[246](index=246&type=chunk) Part II. OTHER INFORMATION [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal claims, but management believes they will not materially harm financial position or results of operations - The company is involved in legal proceedings typical for its business operations but does not currently expect them to have a material adverse effect[247](index=247&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors except for a new one concerning global macroeconomic uncertainty and its potential impact on operations - A new risk factor was added regarding the uncertainty in the global macroeconomic environment, which could be created by rapid governmental policy and regulatory changes, potentially impacting business operations and financial performance[249](index=249&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company repurchased 496,484 shares for $36 million, with $347 million remaining available for future repurchases Q1 2025 Share Repurchases | Period | Total Shares Purchased | Average Price Paid per Share | Total Cost (in millions) | | :--- | :--- | :--- | :--- | | Jan 2025 | 98,932 | $86.14 | ~$8.5 | | Feb 2025 | 0 | N/A | $0 | | Mar 2025 | 397,552 | $69.39 | ~$27.6 | | **Total Q1 2025** | **496,484** | **$72.73** | **~$36** | - As of March 31, 2025, **$347.1 million** remained available for share repurchases under the program authorized through December 31, 2025[251](index=251&type=chunk) [Other Information](index=52&type=section&id=Item%205.%20Other%20Information) No directors or Section 16 officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or Section 16 officers adopted or terminated Rule 10b5-1 trading plans during Q1 2025[252](index=252&type=chunk) [Exhibits](index=52&type=section&id=Item%206.%20Exhibits) Lists all documents filed as part of the Form 10-Q, including certifications and XBRL data, and incorporates previously filed documents by reference

Core Viewpoint - Marriott Vacations Worldwide Corporation (VAC) reported first-quarter 2025 results with earnings exceeding expectations while revenues fell short, leading to an 8.1% increase in share price after hours due to a positive earnings outlook for 2025 [1][2]. Financial Performance - Adjusted earnings per share (EPS) for Q1 2025 were $1.66, surpassing the Zacks Consensus Estimate of $1.56 by 6.4%, but down from $1.80 in the same quarter last year [2]. - Quarterly revenues reached $1.2 billion, missing the consensus estimate of $1.22 billion by 1.9%, but reflecting a year-over-year increase of 0.4% [2]. Segmental Performance - The Vacation Ownership segment generated revenues of $757 million, up from $730 million in the prior-year quarter [3]. - Total contract sales in the Vacation Ownership segment fell 2% year over year to $420 million, primarily due to a lower volume per guest, with first-time buyers contributing to the decline [4]. - Adjusted EBITDA for the Vacation Ownership segment was $221 million, a 4% increase from $213 million in the previous year, with an adjusted EBITDA margin of 29.2%, unchanged year over year [5]. - The Exchange & Third-Party Management segment saw revenues decline 9% year over year to $56 million [5]. Membership and Revenue Metrics - Total active interval international members decreased by 2% year over year to 1.54 million, with average revenue per member declining 4% to $39.94 [6]. - Adjusted EBITDA for this segment was $28 million, down 13% year over year, with an adjusted EBITDA margin contracting by 230 basis points to 49% [6]. Corporate Results - General and administrative expenses for Q1 totaled $61 million, down from $63 million in the prior-year quarter [7]. - Total expenses increased by 1.2% year over year to $1.07 billion [7]. - Adjusted EBITDA for the company was $192 million, up 3% from $187 million in the previous year [7]. Balance Sheet - As of March 31, 2025, cash and cash equivalents were $196 million, slightly down from $197 million at the end of 2024 [8]. - The company had $3 billion in corporate debt and $2 billion in non-recourse debt related to securitized notes receivable [9]. 2025 Outlook - Management revised the contract sales expectation for 2025 to a range of $1.74-$1.83 billion, down from the previous estimate of $1.85-$1.925 billion [10]. - Adjusted EBITDA is now expected to be between $750 million and $780 million, with adjusted income anticipated in the range of $250 to $280 million [10]. - Adjusted EPS is projected to be between $6.40 and $7.10, an increase from the prior expectation of $6.30 and $7.00 [10]. - Adjusted free cash flow is expected to be in the range of $270-$330 million, down from the previous estimate of $290-$350 million [11].

Investor Presentation May 8, 2025 Forward-Looking Statements Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "might," "should," "could" or the negative of these terms or similar expressions. We caution you that these statements are not guarantees of future performance and are subject to nu ...

Core Insights - Marriott Vacations Worldwide reported revenue of $1.2 billion for the quarter ended March 2025, reflecting a year-over-year increase of 0.4% [1] - The company's EPS was $1.66, down from $1.80 in the same quarter last year, but exceeded the consensus estimate of $1.56 by 6.41% [1] - The revenue fell short of the Zacks Consensus Estimate of $1.22 billion, resulting in a surprise of -1.93% [1] Revenue Breakdown - Cost reimbursements revenue was $373 million, below the average estimate of $402 million, marking a year-over-year decline of 4.6% [4] - Rental revenue reached $169 million, surpassing the average estimate of $162.88 million, with a year-over-year increase of 7% [4] - Management and exchange revenue was $215 million, slightly below the average estimate of $216.29 million, showing a year-over-year growth of 1.9% [4] - Sales of vacation ownership products generated $355 million, exceeding the average estimate of $347.95 million, with a year-over-year increase of 0.9% [4] - Financing revenue was $88 million, above the average estimate of $86 million, reflecting a year-over-year growth of 6% [4] Stock Performance - Shares of Marriott Vacations Worldwide have returned +14.1% over the past month, outperforming the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]