Choice Hotels International Earnings: Here’s Why Shares are Down Now

Choice Hotels International Inc. (NYSE:CHH) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 0.96%.

Choice Hotels International Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 12.73% to $0.48 in the quarter versus EPS of $0.55 in the year-earlier quarter.

Revenue: Rose 5.75% to $183.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Choice Hotels International Inc. reported adjusted EPS income of $0.48 per share. By that measure, the company beat the mean analyst estimate of $0.46. It beat the average revenue estimate of $181.35 million.

Quoting Management: “We are excited about the growth prospects for our core franchising business. We are seeing particularly strong RevPAR performance for our upscale Ascend Collection, Suburban Extended Stay Hotel brand and our Sleep Inn brand which delivered impressive results as more of our franchisees upgrade their hotels to our new Design to Dream proto-type,” said Stephen P. Joyce, president and chief executive officer. “On the development side of the business, conversion franchise sales for our flagship Comfort brand and our Ascend Collection continued to outpace last year’s results demonstrating that Choice remains a top option for hotel developers.”

Key Stats (on next page)…

Revenue increased 34.14% from $136.87 million in the previous quarter. EPS increased 84.62% from $0.26 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.71 to a profit $0.69. For the current year, the average estimate has moved down from a profit of $1.97 to a profit of $1.89 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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