Marriott Vacations Worldwide 2025 Q1 Earnings EPS Rises 21.2%

Marriott Vacations Worldwide (VAC) reported its fiscal 2025 Q1 earnings on May 07th, 2025. The total revenue of Marriott Vacations Worldwide increased by 0.4% to $1.20 billion in 2025 Q1, up from $1.20 billion in 2024 Q1. Marriott Vacations Worldwide (VAC) came out with quarterly earnings of $1.66 per share, beating the Zacks Consensus Estimate of $1.56 per share. Meanwhile, the company's profitability strengthened with net income of $57 million in 2025 Q1, marking 23.9% growth from $46 million in 2024 Q1.

Revenue

Marriott Vacations Worldwide's revenue for 2025 Q1 totaled $1.20 billion, marking a slight increase from the previous year. The sale of vacation ownership products generated $355 million, while management and exchange activities contributed $215 million. The rental segment added $169 million, and financing brought in $88 million. Cost reimbursements accounted for $373 million, maintaining the overall revenue growth.

Earnings/Net Income

Earnings per share for Marriott Vacations Worldwide rose significantly by 21.2%, reaching $1.60 in 2025 Q1 compared to $1.32 in the prior year. The company's net income also saw substantial growth, increasing by 23.9% to $57 million from $46 million year-over-year. The rise in EPS reflects the company's strong financial performance and strategic growth initiatives.

Post-Earnings Price Action Review

Over the past five years, the strategy of purchasing Marriott Vacations Worldwide shares following a quarter-over-quarter revenue increase and holding them for 30 days has yielded a 9.69% return. This performance, however, falls short of the benchmark by 74.40%. The strategy's compound annual growth rate (CAGR) stood at 1.87%, with a maximum drawdown of -19.62%. The Sharpe ratio was calculated at 0.12, indicating modest risk-adjusted returns and significant volatility during this period. Investors may find this historical pattern informative when considering future investments, although the strategy's underperformance relative to the benchmark suggests caution. The company's stock movements post-earnings have not consistently outpaced broader market indices, highlighting the need for a comprehensive evaluation of both the company's financial health and broader market conditions.

CEO Commentary

"We had a strong first quarter growing first time buyer sales and Adjusted EBITDA, illustrating the power of our leisure-focused business model," said John Geller, President and Chief Executive Officer. He noted that the Company is reiterating its full-year Adjusted EBITDA guidance in light of its strong profitability performance and progress on transformation initiatives, highlighting the continued focus on growth drivers while navigating challenges related to contract sales.

Guidance

The Company is updating its full-year 2025 guidance, expecting contract sales between $1,740 million and $1,830 million, Adjusted EBITDA of $750 million to $780 million, adjusted net income attributable to common stockholders of $250 million to $280 million, adjusted earnings per share - diluted ranging from $6.40 to $7.10, and adjusted free cash flow between $270 million and $330 million.

Additional News

Marriott Vacations Worldwide recently completed a $450 million securitization of vacation ownership loans, which was well-received by investors, indicating robust confidence in its timeshare loan portfolio despite market volatility. The transaction was oversubscribed more than three times for each class of notes, reflecting the strength of the company's business model. The proceeds will be used to pay down existing credit facility obligations and for other general corporate purposes, enhancing the company's financial position and operational capacity. This strategic financial move underscores Marriott Vacations Worldwide's commitment to strengthening its balance sheet and supporting future growth initiatives.