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Xenia Hotels & Resorts Inc (XHR) Reports Q1 2024 Earnings: Surpasses Net Income Expectations

GuruFocus Research
·3 min read

  • Net Income: Reported at $8.5 million, significantly surpassing the estimated $0.96 million.

  • Earnings Per Share (EPS): Achieved $0.08 per share, exceeding the estimated $0.03 per share.

  • Revenue: Totalled $267.49 million for the quarter, surpassing the estimated $258.43 million.

  • Adjusted EBITDA: Recorded at $65.3 million, a decrease of 8.5% year-over-year.

  • Same-Property RevPAR: Decreased by 1.5% to $176.86, with a notable increase of 3.7% when excluding the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch.

  • Dividends: Declared a quarterly dividend of $0.12 per share to common stockholders.

  • Stock Repurchase: Repurchased 468,107 shares at an average price of $13.51 per share, totaling approximately $6.3 million.

Xenia Hotels & Resorts Inc (NYSE:XHR) released its 8-K filing on May 2, 2024, detailing its financial results for the first quarter ended March 31, 2024. The company reported a net income of $8.5 million, significantly surpassing the estimated $0.96 million, and earnings per share (EPS) of $0.08, exceeding the analyst estimate of $0.03. However, the revenue for the quarter was $267.48 million, slightly below the expected $258.43 million.

Company Overview

Xenia Hotels & Resorts Inc is a real estate investment trust (REIT) focusing on premium full-service, lifestyle, and urban upscale hotels across the United States. The REIT owns properties in strategic locations within the upscale, upper upscale, and luxury segments, affiliated with renowned brands such as Marriott, Hilton, and Hyatt. Xenia's revenue streams are primarily derived from room sales, which contribute significantly to the total revenue, complemented by food and beverage services.

Operational Highlights and Challenges

The first quarter of 2024 saw a net income increase of 35.9% year-over-year, with basic and diluted net income per share rising by 33.3%. Adjusted EBITDAre decreased by 8.5% to $65.3 million, reflecting some operational challenges, including a decrease in Same-Property Hotel EBITDA by 8.5% and a 228 basis points drop in EBITDA Margin. These figures were impacted by ongoing renovations at Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch, which is undergoing a significant transformation.

Financial Achievements and Strategic Initiatives

Despite the challenges, Xenia achieved notable financial milestones. The company repurchased 468,107 shares for approximately $6.3 million and declared a quarterly dividend of $0.12 per share. The renovation of Hyatt Regency Scottsdale is expected to enhance the property's value and contribute to revenue growth upon completion. Additionally, the company's strategic acquisitions and renovations, like those at Grand Bohemian Hotel Orlando and Canary Hotel Santa Barbara, have started to yield positive results, particularly in group-oriented hotels in key cities.

Detailed Financial Analysis

Xenia's balance sheet remains robust, with total assets of $2.9 billion as of March 31, 2024. The company has maintained a strong liquidity position with approximately $590 million available, including full availability on its revolving line of credit. The total outstanding debt stands at approximately $1.4 billion with a weighted-average interest rate of 5.47%.

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"We are pleased with our first quarter results as our portfolio RevPAR and Adjusted EBITDAre exceeded our expectations for the quarter," said Marcel Verbaas, Chair and Chief Executive Officer of Xenia.

This performance underscores the effectiveness of Xenia's strategic initiatives and its ability to navigate the complexities of the hospitality market. The company's focus on high-quality properties and strategic market presence continues to be a cornerstone of its business strategy, aiming for sustained growth and shareholder value enhancement.

Outlook and Forward Guidance

Looking ahead, Xenia remains cautious yet optimistic about its performance in 2024, maintaining its guidance for Adjusted EBITDAre and Adjusted FFO. The ongoing renovations and market positioning are expected to bolster the company's performance, particularly with the anticipated completion of major projects like the Grand Hyatt Scottsdale.

For detailed insights and continuous updates on Xenia Hotels & Resorts Inc's financial performance and strategic initiatives, visit GuruFocus.com.

Explore the complete 8-K earnings release (here) from Xenia Hotels & Resorts Inc for further details.

This article first appeared on GuruFocus.