Vacation ownership company Marriott Vacations (NYSE: VAC) missed Wall Street’s revenue expectations in Q1 CY2025, with sales flat year on year at $1.2 billion. Its non-GAAP profit of $1.66 per share was 15.8% above analysts’ consensus estimates.
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Marriott Vacations (VAC) Q1 CY2025 Highlights:
- Revenue: $1.2 billion vs analyst estimates of $1.21 billion (flat year on year, 0.9% miss)
- Adjusted EPS: $1.66 vs analyst estimates of $1.43 (15.8% beat)
- Adjusted EBITDA: $192 million vs analyst estimates of $176.2 million (16% margin, 9% beat)
- Management raised its full-year Adjusted EPS guidance to $6.75 at the midpoint, a 1.5% increase
- EBITDA guidance for the full year is $765 million at the midpoint, above analyst estimates of $744.2 million
- Guests: 1,538, down 1.56 million year on year
- Market Capitalization: $2.01 billion
Company Overview
Spun off from Marriott International in 1984, Marriott Vacations (NYSE: VAC) is a vacation company providing leisure experiences for travelers around the world.
Sales Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Marriott Vacations’s 2.9% annualized revenue growth over the last five years was weak. This fell short of our benchmarks and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. Marriott Vacations’s annualized revenue growth of 2.1% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.
This quarter, Marriott Vacations’s $1.2 billion of revenue was flat year on year, falling short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 3.8% over the next 12 months. Although this projection implies its newer products and services will fuel better top-line performance, it is still below average for the sector.
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Operating Margin
in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sadly for Marriott Vacations, its EPS declined by 6.6% annually over the last five years while its revenue grew by 2.9%. This tells us the company became less profitable on a per-share basis as it expanded.
In Q1, Marriott Vacations reported EPS at $1.66, down from $1.68 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Marriott Vacations’s full-year EPS of $6.10 to grow 10.6%.
Key Takeaways from Marriott Vacations’s Q1 Results
We enjoyed seeing Marriott Vacations beat analysts’ EPS expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. On the other hand, its revenue fell slightly short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 4.8% to $61 immediately following the results.
Indeed, Marriott Vacations had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.
