With recession fears mounting, Marriott CEO Anthony Capuano is striking an upbeat tone on future demand.
“We had a terrific quarter, which illustrated the resilience of travel broadly and the resilience of Marriott’s business model,” Capuano said on Yahoo Finance Live. Capuano added he is “not seeing” a marked slowdown in business as the economy has slowed.
The optimism by Capuano is not unfounded.
Marriott said Tuesday that second-quarter revenue per available room (RevPar) surged 70.6% worldwide as the company pushed through price increases at a time of strong demand from leisure travelers. Occupancy levels improved at all of Marriott’s brands in the U.S. compared to a year ago.
International occupancy improved 13.4 percentage points year over year but was held back by declines in China due to tough COVID-19 restrictions.
Here is how Marriott performed compared to Wall Street estimates:
Net Sales: $5.34 billion vs. $5.02 billion
Adjusted EBITDA: $1.01 billion vs. $928 million
Adjusted EPS: $1.80 vs. $1.57
Adjusted Full Year EPS Guidance: $6.33 to $6.59 vs. $5.97
Marriott stock rose 1% as of 1:06 p.m. ET in Tuesday trading.
Capuano said the forward demand signals he tracks look strong and not recession-esque.
“Labor Day looks great,” Capuano said. “Our forward bookings for Labor Day are up mid-teens [percentage points] over where we were in 2019.”
Wall Street appears to be viewing the quarter and outlook favorably in the early going.
“There is no sign of any slowdown,” said Bernstein analyst Richard Clarke in a flash note to clients.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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