Choice Hotels: A Strong Q3 2024 Performance
Monday, Nov 4, 2024 6:42 am ET
1min read Choice Hotels International, Inc. (NYSE: CHH) reported robust third quarter 2024 results, demonstrating the company's resilience and growth potential. The lodging franchisor generated record financial performance, driven by strategic initiatives and a strong business model.
**Record Financial Performance**
Choice Hotels' total revenues reached $428.0 million for the third quarter 2024, a 1% increase compared to the same period in 2023. Net income increased 15% to $105.7 million, representing a quarterly record and a 23% increase in diluted earnings per share (EPS) compared to the same period in 2023. Adjusted net income and adjusted diluted EPS also saw significant increases of 15% and 23%, respectively. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew to a quarterly record of $177.6 million, a 14% increase compared to the same period in 2023.
**Global Pipeline Expansion and Hotel Openings**
The company's global pipeline increased by 11% to over 110,000 rooms, with a notable 54% increase in conversion rooms. Domestic rooms pipeline increased by 10%, including a 68% increase for conversion rooms. Global hotel openings surged by 75% compared to the same period in 2023. The international portfolio expanded by 3.8% in the number of rooms, with international hotel openings tripling compared to the same period in 2023.
**Strategic Initiatives and Growth Drivers**
Choice Hotels' strong performance can be attributed to several strategic initiatives. The company accelerated its unit and room growth across its domestic and international portfolios, with the upscale, extended stay, and midscale rooms portfolio increasing by 1.8% globally. The company's versatile business model, effective management, and favorable market trends have contributed to its success.
The company repurchased 2.9 million shares of common stock for $352.9 million year-to-date through September 30, 2024, representing over 6% of the company's market capitalization at the beginning of the year. Choice Hotels also increased the midpoint of its guidance for net income, adjusted EBITDA, diluted EPS, and adjusted diluted EPS for full-year 2024, reflecting its confidence in the company's growth prospects.
**Investment Thesis**
Choice Hotels' strong third quarter 2024 results demonstrate the company's ability to generate sustained top-line and earnings growth while returning significant capital to shareholders. With a low-risk business model, effective management, and favorable market trends, Choice Hotels offers an attractive investment opportunity for those seeking undervalued opportunities with strong growth potential and solid fundamentals. The company's strategic initiatives, global pipeline expansion, and hotel openings further reinforce its investment thesis.
In conclusion, Choice Hotels International's robust third quarter 2024 performance highlights the company's resilience and growth potential. With a strong financial performance, global pipeline expansion, and strategic initiatives, Choice Hotels offers an attractive investment opportunity for investors seeking undervalued opportunities with strong growth potential and solid fundamentals.
**Record Financial Performance**
Choice Hotels' total revenues reached $428.0 million for the third quarter 2024, a 1% increase compared to the same period in 2023. Net income increased 15% to $105.7 million, representing a quarterly record and a 23% increase in diluted earnings per share (EPS) compared to the same period in 2023. Adjusted net income and adjusted diluted EPS also saw significant increases of 15% and 23%, respectively. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew to a quarterly record of $177.6 million, a 14% increase compared to the same period in 2023.
**Global Pipeline Expansion and Hotel Openings**
The company's global pipeline increased by 11% to over 110,000 rooms, with a notable 54% increase in conversion rooms. Domestic rooms pipeline increased by 10%, including a 68% increase for conversion rooms. Global hotel openings surged by 75% compared to the same period in 2023. The international portfolio expanded by 3.8% in the number of rooms, with international hotel openings tripling compared to the same period in 2023.
**Strategic Initiatives and Growth Drivers**
Choice Hotels' strong performance can be attributed to several strategic initiatives. The company accelerated its unit and room growth across its domestic and international portfolios, with the upscale, extended stay, and midscale rooms portfolio increasing by 1.8% globally. The company's versatile business model, effective management, and favorable market trends have contributed to its success.
The company repurchased 2.9 million shares of common stock for $352.9 million year-to-date through September 30, 2024, representing over 6% of the company's market capitalization at the beginning of the year. Choice Hotels also increased the midpoint of its guidance for net income, adjusted EBITDA, diluted EPS, and adjusted diluted EPS for full-year 2024, reflecting its confidence in the company's growth prospects.
**Investment Thesis**
Choice Hotels' strong third quarter 2024 results demonstrate the company's ability to generate sustained top-line and earnings growth while returning significant capital to shareholders. With a low-risk business model, effective management, and favorable market trends, Choice Hotels offers an attractive investment opportunity for those seeking undervalued opportunities with strong growth potential and solid fundamentals. The company's strategic initiatives, global pipeline expansion, and hotel openings further reinforce its investment thesis.
In conclusion, Choice Hotels International's robust third quarter 2024 performance highlights the company's resilience and growth potential. With a strong financial performance, global pipeline expansion, and strategic initiatives, Choice Hotels offers an attractive investment opportunity for investors seeking undervalued opportunities with strong growth potential and solid fundamentals.