Here’s Why Marriott Vacations Worldwide Lost 8% On Thursday

Here’s Why Marriott Vacations Worldwide Lost 8% On Thursday

Published: 14/10/2016 – Follow on twitter: @SMDailyCo

Marriott Vacations Worldwide

Shares of Marriott Vacations Worldwide (NYSE: VAC), a developer, marketer, seller and manager of vacation ownership and related products, fell more than 8 percent on Thursday after the company reported disappointing third quarter results and updated its guidance.

The company said that it earned $0.96 per share in the third quarter on revenue of $406.99 million.  Wall Street analysts were expecting the company to earn $1.15 per share on revenue of $446.83 million.

Net income for the quarter rose to $26.8 million from $21.6 million in the same quarter a year ago while contract sales in the North America and Asia Pacific segments rose 8.3 percent, marking an acceleration of the year-over-year growth that began at the end of the prior quarter.

The company attributed its sales growth to a continued ramp-up at its North American and Asia Pacific sales centers and improving sales at already existing sites.

Total company vacation ownership contract sales in the quarter totaled $169.8 million, up from $159.76 million in the same quarter a year ago.

Marriott Vacations noted that it did not purchase any of its shares during the quarter due to limitations from the accelerated share repurchase program it entered in the second quarter.  Since the start of the year the company did buy back 2.8 million shares for a total consideration of $163.4 million and also paid out more than $26 million directly to shareholders in the form of dividends.

Looking forward to the full fiscal year, the company revised its outlook lower and now expects its adjusted net income to fall in a range of $129 million to $132 million which represents a narrowing of its prior outlook of $126 million to $136 million.

The company also expects to earn $4.55 to $4.65 per share for the full year, also representing a narrowing of its prior guidance of $4.43 to $4.78.  In addition, management also expects contract sales to be around four percent after previously guiding for a range of four percent to eight percent.

Despite a narrower than expected outlook and a third quarter print which missed on both the top and bottom line, the company’s President and CEO Stephen Weisz said that he remains “confident in our growth strategy and the solid foundation we are building for continued sales growth going into 2017.”