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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Despite strong shareholder return initiatives, the earnings call revealed several negative factors: EPS and revenue missed expectations, guidance was lowered due to economic uncertainties, and there is a decline in occupancy rates. The Q&A highlighted concerns about government demand, international travel, and increased cancellations. Although there are positive aspects like share repurchases and a new partnership, the overall sentiment remains negative, especially given the market cap of $1.48 billion, which implies a more pronounced reaction to these developments.
EPS Reported EPS is $-0.03, down from expectations of $0.3.
RevPAR RevPAR was $141.23, achieving growth of 1.6% year-over-year, driven by a 2.1% increase in ADR, offset by a 0.5% decline in occupancy.
Average Daily Rate (ADR) ADR was $204.31, up 2.1% year-over-year.
Occupancy Rate Occupancy was 69.1%, down 0.5% year-over-year.
Total Revenue Total revenue grew by 1.2% year-over-year.
Hotel EBITDA Hotel EBITDA was $85.3 million, down $3 million from 2024, impacted by $2.5 million of one-time COVID credits last year and one less day in the current quarter.
Adjusted EBITDA Adjusted EBITDA was $77.6 million.
Adjusted FFO per diluted share Adjusted FFO per diluted share was $0.31.
Out-of-Room Spend Out-of-room spend increased by 3.8% year-over-year.
Debt Total debt was $2.2 billion, with $600 million available under the undrawn corporate revolver.
Liquidity Liquidity at the end of the first quarter was over $0.8 billion.
Share Repurchase Approximately 2.7 million shares were repurchased for $24.3 million at an average price of $8.91 per share.
Quarterly Dividend Quarterly dividend of $0.15 per share is well covered by free cash flow.
RevPAR Growth: Achieved RevPAR growth of 1.6% in Q1 2025, driven by a 2.1% increase in ADR.
Urban Hotel Performance: Urban hotels achieved robust RevPAR growth of 3.6%, with high-single-digit growth in several markets.
Group Segment Growth: Group segment revenue grew by 10%, driven by strong city-wide events.
Leisure Segment Performance: Leisure segment revenues increased by 2%, with urban leisure achieving 3% growth.
Cost Control: Total hotel operating cost growth moderated to 2.9%, reflecting effective cost management.
Balance Sheet Strength: Strengthened balance sheet by addressing current and forward maturities, maintaining $600 million available under corporate revolver.
Capital Allocation: Recycled capital through the sale of a non-core asset and repurchased approximately 2.7 million shares for $24.3 million.
Share Repurchase Program: Board approved a new one-year $250 million share repurchase program.
Earnings Expectations: RLJ Lodging Trust reported an EPS of $-0.03, missing expectations of $0.3.
Market Conditions: The company acknowledged a weaker backdrop in the industry, with headwinds starting in March and continuing into April.
Occupancy Rates: There was a 0.5 point decline in occupancy, indicating potential challenges in attracting guests.
Booking Trends: Shortened booking windows were noted, reflecting heightened uncertainty among travelers.
Government Demand: Government-related demand remains soft, contributing to overall revenue challenges.
International Demand: Softness in international demand was observed, particularly in key markets like New York and California.
Economic Uncertainty: The company highlighted continued elevated macroeconomic risks and headline-driven volatility affecting visibility on near-term results.
Capital Allocation: While the company is actively managing its balance sheet, the uncertain economic landscape poses risks to future capital allocation decisions.
Revenue Management: The company noted that the industry-wide improvement in revenue management could help maintain rate integrity, but uncertainty remains.
Future Guidance: The company adjusted its full-year guidance due to the current economic environment, indicating reduced visibility on future performance.
RevPAR Growth: Achieved RevPAR growth of 1.6% driven by a 2.1% increase in ADR, despite a 0.5 point decline in occupancy.
Capital Allocation: Strengthened balance sheet by addressing current maturities and selling a non-core asset at an 18 times multiple, redeploying proceeds into share repurchases.
Conversions: 2025 conversions remain on track, with Nashville renovation in final stages and RevPAR growth of 16% during the quarter.
Share Repurchase Program: Recycled proceeds from a non-core disposition to repurchase approximately 2.7 million shares for $24.3 million at an average price of $8.91 per share.
New Share Repurchase Program: Board approved a new one-year $250 million share repurchase program.
RevPAR Guidance: Expect comparable RevPAR growth to range between negative 1% and up 1% for 2025.
Hotel EBITDA Guidance: Expect comparable hotel EBITDA between $365.5 million and $395.5 million.
Corporate Adjusted EBITDA Guidance: Expect corporate adjusted EBITDA between $332.5 million and $362.5 million.
Adjusted FFO Guidance: Expect adjusted FFO per diluted share to be between $1.38 and $1.58.
Capital Expenditures Guidance: Estimate 2025 capital expenditures will be in the range of $80 million to $100 million.
Cash G&A Guidance: Estimate cash G&A will be in the range of $34 million to $35 million.
Net Interest Expense Guidance: Expect net interest expense to be in the range of $94 million to $96 million.
Quarterly Dividend: $0.15 per share, well covered and supported by free cash flow.
Share Repurchase Program: $250 million share repurchase program approved, with $24.3 million used to repurchase approximately 2.7 million shares at an average price of $8.91 per share.
Share Repurchase Activity: 100% of proceeds from a non-core asset sale were recycled into share repurchases.
New Share Repurchase Program: A new one-year $250 million share repurchase program was approved by the Board.
The earnings call presents a mixed outlook. Despite positive developments like renovations and strategic events in 2026, current headwinds such as softer RevPAR, government shutdown impacts, and cost pressures overshadow potential gains. The Q&A reveals management's optimism for long-term growth, but immediate challenges like declining RevPAR and unclear guidance responses raise concerns. Given the company's small-cap status and current market conditions, the stock is likely to experience a negative reaction in the short term.
The company's earnings call reveals mixed signals: strong urban leisure performance and positive Nashville market updates are offset by soft group bookings and flat RevPAR guidance. While F&B revenue is up, leisure rate pressure and unclear management responses on supply growth impact create uncertainty. The market cap suggests a moderate reaction, leading to a neutral sentiment.
Despite strong shareholder return initiatives, the earnings call revealed several negative factors: EPS and revenue missed expectations, guidance was lowered due to economic uncertainties, and there is a decline in occupancy rates. The Q&A highlighted concerns about government demand, international travel, and increased cancellations. Although there are positive aspects like share repurchases and a new partnership, the overall sentiment remains negative, especially given the market cap of $1.48 billion, which implies a more pronounced reaction to these developments.
The earnings call summary presents mixed signals: Basic Financial Performance is weak with declining occupancy and EBITDA, but there's a positive outlook on RevPAR growth and shareholder returns through repurchases and dividends. The Q&A section highlights uncertainties in government demand and international travel, with some positive momentum in Northern California. The financial health appears stable, but the lack of strong guidance and uncertainties in demand balance out positives, leading to a neutral market reaction prediction.
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