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- **Top Line Challenges**: Q3 contract sales down 4% YoY, driven by Orlando and Maui underperformance, despite flat growth elsewhere.
- **Strategic Initiatives**: Curbing commercial rentals, sales incentives, and FICO scoring to drive VPGs and owner satisfaction.
- **Modernization Progress**: $20M annual cost savings from HR/Finance outsourcing, on track for $150M-$200M EBITDA benefit by 2026.
- **Financial Outlook**: Full-year contract sales expected to decline 2%-3%, with adjusted EBITDA guidance of $740M-$755M.
- **Rental Risks**: Higher unsold maintenance fees in 2026 offset by efforts to improve RevPAR and owner arrivals.

**【CEO Summary Section】**
- Q3 contract sales declined 4% YoY, driven by weakness in Orlando and Maui, offsetting flat performance in other markets. Key initiatives include:
  - Adjusted sales and marketing incentives to align with long-term goals.
  - Curbing commercial rental activity to increase owner arrivals and VPGs.
  - Implementation of FICO scoring for marketing to improve credit metrics.
- Modernization program on track to deliver $150M-$200M EBITDA benefit by end-2026, with $20M annual cost savings from HR/Finance outsourcing.
- New resort openings in Asia (Khao Lak, Thailand) expected to contribute $80M+ in annual sales within a few years.
- Full-year guidance updated: contract sales down 2%-3%, VPGs flat to down, tours flat to up slightly.

**【CFO Financial Commentary】**
- Q3 contract sales down 4% YoY (VPG -5%, tours -1%), with first-time buyer sales down 2% and owner sales down 5%.
- Financing propensity increased 90bps YoY, sales reserve at 13% of contract sales.
- Adjusted EBITDA decreased 15% YoY to $170M, driven by lower contract sales and higher unsold maintenance fees.
- Balance sheet: $1.4B liquidity, leverage at 4.1x, with $575M senior notes issued to repay convertible debt.
- Full-year guidance: contract sales -2% to -3%, management/exchange profit $380M, financing profit $210M, adjusted EBITDA $740M-$755M.

**【Q&A Key Highlights】**
- **Commercial Rental Activity**: Small subset of owners using Bonvoy points for commercial rentals, impacting inventory availability. Initiatives to enforce rules expected to improve owner satisfaction and VPGs.
- **Sales Force Management**: Focus on retaining top talent, recruiting, and training, with incentives to drive owner arrivals (e.g., Bonvoy points for 2-month arrivals).
- **Rental Business Outlook**: Higher unsold maintenance fees expected in 2026, offset by efforts to improve RevPAR. Q3 rental profit down $17M YoY, with seasonality and market challenges.
- **Strategic Alternatives**: Board evaluating all options to maximize shareholder value, including modernization program and asset dispositions.


Marriott Vacations Worldwide Corporation (VAC) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

VAC

VAC fundamentals

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