Yahoo Finance H World (HTHT) Q1 Earnings Miss, Revenues Surpass Estimates
H World Group Limited HTHT delivered mixed first-quarter 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top line grew year over year while the bottom line dwindled.
The company’s results reflect solid contributions from its Legacy-Huazhu and Legacy-DH segments, primarily driven by the growth in hotel openings and increased revenue per available room (RevPAR). Furthermore, the effective execution of its Service Excellence-Centric Sustainable Quality Growth Strategy bode well. However, increasing total operating costs and expenses year over year partially offset the aforementioned tailwinds.
Nonetheless, HTHT remains optimistic about upcoming growth trends, given its focus on its growth strategy, new unit expansion and portfolio diversification.
Q1 Earnings and Revenues
H World reported adjusted earnings per share (EPS) of 29 cents, which missed the Zacks Consensus Estimate of 32 cents by 9.4%. It reported adjusted EPS of 44 cents in the prior-year quarter.
H World Group Limited Sponsored ADR Price, Consensus and EPS Surprise
H World Group Limited Sponsored ADR price-consensus-eps-surprise-chart | H World Group Limited Sponsored ADR Quote
Quarterly revenues of $731 million topped the consensus mark of $699 million by 4.6%. The metric rose 17.8% from the year-ago quarter’s level of $652 million.
Operating Results
The company’s operating margin was up 420 basis points year over year to 19%. The margin improvement was mainly due to higher revenue contribution from manachised and franchised businesses.
Adjusted EBITDA was $197 million, up 37.8% from the year-ago reported figure.
Total operating costs and expenses increased 11.9% year over year to $601.5 million.
Balance Sheet
As of Mar 31, 2024, H World had cash and cash equivalents of $818 million, down from $978 million reported in 2023-end.
Long-term debt at the end of the first quarter was $228 million compared with $179 million reported in 2023-end.
Other Business Updates
During the first quarter, the Legacy-Huazhu segment of H World opened 569 hotels, including two leased and owned hotels, and 567 manachised and franchised hotels. As of Mar 31, 2024, HTHT had 9,817 hotels (or 955,657 rooms), including 9,684 hotels from Legacy-Huazhu and 133 hotels from Legacy-DH.
As of the first-quarter end, the company had 3,172 unopened hotels in the pipeline, comprising 3,138 hotels from the Legacy-Huazhu business and 34 hotels from the Legacy-DH business.
Q2 Outlook
For the second quarter, H World expects its revenues to grow in the range of 7-11% on a year-over-year basis.
Zacks Rank & Other Key Picks
H World currently carries a Zacks Rank #2 (Buy).
Here are some other top-ranked stocks from the Consumer Discretionary sector.
Strategic Education, Inc. STRA currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
STRA has a trailing four-quarter earnings surprise of 36.2%, on average. The stock has increased 51.5% in the past year. The Zacks Consensus Estimate for STRA’s 2024 sales and EPS indicates an increase of 6.4% and 33.3%, respectively, from the year-ago levels.
Netflix, Inc. NFLX presently sports a Zacks Rank of 1. NFLX has a trailing four-quarter earnings surprise of 9.3%, on average. The stock has surged 72.2% in the past year.
The Zacks Consensus Estimate for NFLX’s 2024 sales and EPS implies a rise of 14.7% and 52.1%, respectively, from the year-ago levels.
Royal Caribbean Cruises Ltd. RCL currently sports a Zacks Rank of 1. RCL has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has surged 84.7% in the past year.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS implies growth of 16.6% and 61.9%, respectively, from the year-ago levels.
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Strategic Education Inc. (STRA) : Free Stock Analysis Report
H World Group Limited Sponsored ADR (HTHT) : Free Stock Analysis Report
