Marriott Vacations (VAC) Q2 Earnings & Revenues Lag Estimates

Core Insights - Marriott Vacations Worldwide Corporation (VAC) reported disappointing second-quarter 2024 results, with both earnings and revenues falling short of Zacks Consensus Estimates, showing a year-over-year decline [1][3] Earnings & Revenue Discussion - Adjusted earnings per share (EPS) were $1.10, missing the Zacks Consensus Estimate of $1.99 by 44.7%, down from $2.19 in the same quarter last year [3] - Quarterly revenues totaled $1,140 million, missing the consensus mark of $1,217 million by 6.3%, and declined 3% year-over-year [3] Segmental Performances - Vacation Ownership segment revenues were $1.08 billion, down 3.1% from $1.1 billion in the prior-year quarter [4] - Contract sales in the Vacation Ownership segment decreased by 1% year-over-year to $449 million, primarily due to a 6% decline in VPG and the impact of the Maui wildfires; excluding Maui, contract sales rose 3% [4] - Adjusted EBITDA for the Vacation Ownership segment was $180 million, down 26% from $245 million in the year-ago quarter [4] - Exchange & Third-Party Management segment revenues were $58 million, a decrease of 10.8% year-over-year, with adjusted EBITDA at $25 million, down 22% [5] Expenses & EBITDA - Total expenses increased by 3.5% year-over-year to $1.04 billion, while adjusted EBITDA was $157 million, down 29% from $222 million in the prior-year quarter [7] Balance Sheet - As of June 30, the company had cash and cash equivalents of $206 million, down from $248 million as of December 31, 2023; corporate debt stood at $3.1 billion and nonrecourse debt at $2.1 billion [8] Updated 2024 Outlook - Management revised contract sales guidance for 2024 to a range of $1,790-$1,825 million, down from $1,880-$1,930 million; adjusted free cash flow is now projected at $300-$340 million, down from $400-$450 million [9] - Adjusted EBITDA is estimated to be between $685 million and $715 million, reduced from the previous estimate of $760 million to $800 million [9] - Adjusted EPS expectations have been lowered to a range of $5.90 to $6.45, down from the prior estimate of $7.45 to $8.16 [10]