Marriott Vacations’ third quarter was met with a significant negative market reaction, reflecting investor concern following a revenue decline and lower margins. Management attributed the shortfall primarily to weakness in Orlando and Maui, two of its largest markets, and acknowledged the impact of increased commercial rental activity by a subset of owners, which limited owner arrivals and pressured sales performance. CEO John Geller described the results as “disappointing” and highlighted that operational changes, including adjustments to sales and marketing incentives, were implemented to address the underperformance.
Is now the time to buy VAC? Find out in our full research report (it’s free for active Edge members).
Marriott Vacations (VAC) Q3 CY2025 Highlights:
- Revenue: $1.26 billion vs analyst estimates of $1.32 billion (3.2% year-on-year decline, 4.5% miss)
- Adjusted EPS: $1.69 vs analyst estimates of $1.60 (5.6% beat)
- Adjusted EBITDA: $170 million vs analyst estimates of $184.6 million (13.5% margin, 7.9% miss)
- Management raised its full-year Adjusted EPS guidance to $6.90 at the midpoint, a 2.2% increase
- EBITDA guidance for the full year is $747.5 million at the midpoint, below analyst estimates of $760.8 million
- Operating Margin: 2.6%, down from 11.3% in the same quarter last year
- Guests: 1.5 million, down 45,792 year on year
- Market Capitalization: $1.62 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Marriott Vacations’s Q3 Earnings Call
- Benjamin Chaiken (Mizuho Securities) asked about strategies to reinvigorate top-line growth and the levers available for boosting tours and VPG. CEO John Geller cited targeted compensation changes, curbs on commercial rentals, and enhanced sales training as key initiatives.
- Charles Scholes (Truist Securities) questioned whether strategic alternatives should be considered given underperformance. Geller responded that management and the board continually review all options to maximize shareholder value.
- Brandt Montour (Barclays) sought clarification on the scope and impact of commercial third-party rental activity. Geller explained that while it is a small subset of owners, their disproportionate bookings impact owner satisfaction and access.
- David Katz (Jefferies) asked about changes in salesforce management and turnover. Geller acknowledged higher turnover in competitive markets like Orlando and the need for improved retention and recruitment, while CFO Jason Marino noted the specific impact of the Maui wildfires on local sales staff.
- Shaun Kelley (Bank of America) pressed on the ability to track and curb commercial rental arbitrage and whether trends were more macro or company-specific. Geller described ongoing tracking efforts and cited both broader economic pressures and unique operational issues as contributors to performance.
Catalysts in Upcoming Quarters
Looking ahead, we will be monitoring (1) the effectiveness of new owner engagement and arrival initiatives in boosting tour flow and sales productivity, (2) the company’s ability to manage rising maintenance fees and product costs amid ongoing modernization efforts, and (3) progress on curbing commercial rental activity, which could unlock inventory for core owners and support future revenue growth. Developments in Asia Pacific and rental profit stabilization will also be important signposts.
Marriott Vacations currently trades at $47.42, down from $67.28 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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