Chatham (CLDT) EPS Drops 30%

Core Insights - Chatham Lodging Trust reported Q2 2025 earnings per share (EPS) of $0.07, with non-GAAP EPS exceeding analyst expectations but overall revenue falling short of estimates [1][5] - The company experienced a 7.2% decline in total revenue year-over-year, totaling $80.3 million for Q2 2025 [5][6] - Adjusted funds from operations (FFO) per diluted share reached $0.36, aligning with the high end of guidance despite a challenging industry backdrop [1][5] Financial Performance - Non-GAAP revenue for Q2 2025 was $28.5 million, significantly below the analysts' estimate of $79.7 million [1] - Adjusted EBITDA for Q2 2025 was reported at $28.5 million, down 9.2% from $31.4 million in Q2 2024 [2][5] - Revenue per available room (RevPAR) in the comparable hotel portfolio decreased by 0.6% to $155 [6][7] Business Overview - Chatham specializes in upscale extended-stay and select-service hotels, utilizing a REIT structure to avoid federal income tax on distributed earnings [3] - The company focuses on disciplined acquisitions of underperforming hotels in high-demand locations and strategic asset recycling [4] Capital Return and Strategy - The trust increased its quarterly common dividend by 29% to $0.09 per share and initiated a $25 million share buyback program [8] - Capital expenditures for Q2 2025 amounted to $9 million, aimed at renovations and adding rooms [8] - The sale of five legacy hotels helped reduce leverage from 23% to 21% [6][8] Future Guidance - For Q3 2025, management expects RevPAR to range from $153 to $156, indicating a potential year-over-year decline of 1.5% to growth of 0.5% [9] - Total hotel revenue is projected between $78.8 million and $80.3 million for Q3 2025, with adjusted FFO per diluted share forecasted to fall between $0.29 and $0.33 [9] - Fiscal 2025 guidance anticipates stable performance with RevPAR expected at $142 to $143 [9][10]