Choice Hotels Q4 Earnings & Revenues Beat Estimates, Stock Up

Core Viewpoint - Choice Hotels International, Inc. (CHH) reported strong fourth-quarter 2024 results, with earnings and revenues exceeding expectations and showing year-over-year growth [1][4]. Financial Performance - Adjusted EPS for Q4 was $1.55, beating the Zacks Consensus Estimate of $1.50 by 3.3%, and up from $1.44 in the prior-year quarter [4]. - Quarterly revenues reached $389.8 million, surpassing the consensus mark of $378 million by 3.1%, and grew 8.8% from $358.4 million in the previous year [4]. - Total operating expenses decreased by 14.6% year over year to $270.6 million [6]. - Adjusted EBITDA was $140.4 million, reflecting a 12.3% year-over-year increase [6]. Business Growth and Strategy - The domestic rooms portfolio saw a 4.3% year-over-year revenue increase, indicating effective growth strategies [3]. - The company relaunched four brands, expanded partnerships, and strengthened its international presence [3]. - Domestic RevPAR increased by 450 basis points year over year, and the effective royalty rate rose by 6 basis points to 5.09% [5]. 2024 Highlights - Total revenues for 2024 were $1.59 billion, up from $1.54 billion in 2023 [8]. - Adjusted EBITDA for 2024 was $604.1 million, compared to $504.5 million in 2023 [8]. - Adjusted diluted EPS for 2024 was $6.88, an increase from $6.11 in the previous year [8]. Room Portfolio Expansion - The domestic net rooms portfolio increased by 3% year over year, with significant growth in the extended stay segment at 9.8% [10]. - The global upscale net rooms portfolio rose by 43.9%, with a pipeline of nearly 25,000 rooms [10]. - As of December 31, 2024, the global pipeline exceeded 97,000 rooms, with around 83,000 in the domestic market [11]. 2025 Outlook - For 2025, the company anticipates adjusted net income between $333 million and $345 million, with adjusted EBITDA expected to be between $625 million and $640 million [12]. - Adjusted diluted EPS is projected to range from $6.98 to $7.24 [12]. - Domestic RevPAR growth for 2025 is estimated at 1% to 2% compared to 2024 levels [13].