Why did VAC's Q2 earnings fall short of expectations?

Marriott Vacations Worldwide's (VAC) Q2 earnings fell short of expectations due to a combination of factors:

1. **Higher Expenses**: The company experienced a decrease in net income, with a reported $217 million for the year, down from $252 million in the previous year. This was largely attributed to increased marketing and sales expenses, which had a significant impact on the bottom line.
2. **Interest Expenses and Litigation Charges**: Marriott Vacations Worldwide also saw an increase in interest expenses and litigation charges, which contributed to the decline in net income attributable to common shareholders. This was reported at $218 million, down from $254 million compared to the prior year.
3. **Occupancy Rate and VPG**: Although the company reported an increase in contract sales and tour growth, the overall occupancy rate and volume per guest (VPG) saw a decrease. The VPG dropped by 4% overall, which could indicate a decline in revenue per available room. This is a critical metric for hotels, as it directly impacts revenue generation.

In summary, Marriott Vacations Worldwide's Q2 earnings fell short due to higher expenses, interest expenses, litigation charges, and a decrease in VPG, despite strong contract sales and tour growth. These factors combined to affect the company's financial performance, leading to earnings that did not meet market expectations.