Marriott’s Q1 CY2025 Results Exceed Expectations
Marriott International (NASDAQ:MAR), a global hospitality company founded by J. Willard Marriott in 1927, recently reported its Q1 CY2025 results, surpassing Wall Street’s revenue expectations with sales growing 4.8% year on year to $6.26 billion. The company’s non-GAAP profit of $2.32 per share was 3% above analysts’ consensus estimates.
Revenue Growth and Performance
Marriott’s revenue growth has been a topic of interest for investors, with the company’s annualized revenue growth rate over the last two years exceeding its five-year trend. However, the company’s sales growth rate has been below the standard for the consumer discretionary sector, raising questions about its long-term performance.
We analyzed Marriott’s quarterly revenue and found that while it has consistently grown over the past few years, the growth rate has been slowing down in recent times. The company’s annualized revenue growth of 7% over the last two years is a significant improvement from its five-year trend, but we were still disappointed by the results.
Revenue Per Available Room
Revenue per available room (RevPAR) is an essential metric for Marriott, as it takes into account daily rates and occupancy levels. This quarter, Marriott reported a modest year-on-year RevPAR growth of 4.8% but beat Wall Street’s estimates by 0.6%. The company’s average RevPAR over the last two years has been around $181.75, which is a key indicator of its revenue performance.
Operating Margin and EBITDA
Marriott’s operating margin might fluctuate slightly over time, but it has generally stayed the same, averaging 15.4% over the last two years. This profitability was solid for a consumer discretionary business and shows that the company manages its expenses well. In Q1, Marriott generated an operating profit margin of 15.1%, in line with the same quarter last year.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable. Marriott’s EPS grew at a solid 13.4% compounded annual growth rate over the last five years, higher than its 4.2% annualized revenue growth. This tells us that the company became more profitable on a per-share basis as it expanded.
Key Takeaways from Marriott’s Q1 Results
It was encouraging to see Marriott beat analysts’ EBITDA and EPS expectations this quarter. On the other hand, its EBITDA guidance for next quarter missed. Zooming out, we think this was a decent quarter featuring some areas of strength but also some blemishes. The stock remained flat at $247.27 immediately following the results.
Conclusion
So should you invest in Marriott right now? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover this in our actionable full research report, which provides detailed analysis and insights into Marriott’s performance.
The company’s long-term growth prospects are an essential consideration for investors. While Marriott has consistently grown its sales over the past few years, the growth rate has been slowing down in recent times. The company’s operating margin has generally stayed the same, averaging 15.4% over the last two years, which is a solid profitability for a consumer discretionary business.
However, we were disappointed by Marriott’s Q1 results, as they missed our standard for the consumer discretionary sector. The company’s sales growth rate has been below par in recent times, raising questions about its long-term performance. We think that investors should consider this when making investment decisions.
In conclusion, while Marriott’s Q1 results exceeded expectations, we believe that the stock is not a buy right now. The latest quarter is just one piece of the longer-term business quality puzzle, and we recommend considering other factors before investing in Marriott.
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In our full research report, we provide detailed analysis and insights into Marriott’s performance, including its revenue growth, operating margin, and EPS. We also discuss the company’s long-term growth prospects and provide recommendations for investors. The report is free to access and provides actionable insights that can help you make informed investment decisions.
We hope this information has been helpful in your research. If you have any questions or would like more information on Marriott’s performance, please don’t hesitate to contact us.