Choice Hotels International (CHH) Announces Fourth Quarter And Full-Year 2024 Earnings Results

Choice Hotels International, Inc. (CHH) today announced its financial results for the recent quarter, showcasing a strong performance that exceeded market expectations. The company reported earnings per share (EPS) of $1.55, surpassing the estimated $1.48, marking a positive difference of $0.07. Additionally, Choice Hotels achieved a revenue of $389.77 million, which is $15.95 million above the anticipated $373.82 million. This impressive earnings beat highlights the company’s robust operational execution and strategic growth initiatives.

Key Highlights:

• Choice Hotels International reported a 16% increase in net income to $299.7 million for full-year 2024, with diluted EPS rising by 22% to $6.20.
• Adjusted EBITDA reached a record $604.1 million, marking a 12% increase from the previous year.
• The company expanded its global net rooms system size by 3.3%, with a 4.3% growth in its domestic portfolio.
• Choice Hotels opened 407 hotels globally in 2024, a 21% increase from 2023.
• A strategic partnership with Westgate Resorts added 21 hotels and 14,471 rooms to the domestic portfolio.
• Domestic RevPAR increased by 4.5% in Q4 2024, outperforming the industry.
• The company repurchased 3.1 million shares of common stock for $382.1 million in 2024.
• For 2025, net income is expected to range between $288 to $300 million, with adjusted EBITDA projected between $625 and $640 million.

Summary:

Choice Hotels International achieved significant financial growth in 2024, with net income rising by 16% to $299.7 million and diluted earnings per share increasing by 22% to $6.20, both surpassing the company’s guidance. The company also set a new record for adjusted EBITDA at $604.1 million, a 12% increase from the previous year. This growth was driven by a 3.3% expansion in the global net rooms system size, including a 4.3% increase in the domestic portfolio, and the opening of 407 hotels worldwide, marking a 21% increase from 2023. The strategic partnership with Westgate Resorts further bolstered the domestic portfolio by adding 21 hotels and 14,471 rooms, enhancing the Choice Privileges rewards program.

Looking ahead to 2025, Choice Hotels anticipates continued growth, with net income expected to range between $288 to $300 million and adjusted EBITDA projected between $625 and $640 million. The company plans to capitalize on its past investments to expand its business scale and accelerate growth. Patrick Pacious, President and CEO, emphasized the success of the company’s growth strategy, stating, “Choice Hotels generated another year of strong results in 2024, exceeding the top end of our earnings guidance and delivering a 4.3% year-over-year net increase in our more revenue-intense domestic rooms portfolio.” The company remains focused on expanding its international footprint, enhancing its partnerships, and unlocking new value through ancillary revenue opportunities.

Choice Hotels International, Inc. (CHH) has experienced a dynamic year in terms of stock price performance, with a notable 26.95% increase over the past year. This impressive annual growth is bolstered by a robust six-month gain of 19.30%, indicating strong investor confidence and positive market sentiment. However, the stock faced a slight setback with a 3.25% decline over the past week, which could be attributed to short-term market fluctuations or profit-taking by investors. On the fundamental side, CHH boasts a healthy price-to-earnings ratio of 28.17, reflecting investor optimism about future earnings growth. The company’s earnings per share (EPS) has grown at a remarkable two-year compound annual growth rate (CAGR) of 16.42%, outpacing its revenue growth of 8.29% over the same period. Despite this, the free cash flow has seen a significant decline, with a two-year CAGR of -33.81%, which may raise concerns about the company’s cash management strategies. Nevertheless, CHH’s return on invested capital stands at a solid 17.64%, and a net profit margin of 15.54% underscores its operational efficiency and profitability.

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor worldwide. The company operates in Hotel Franchising and Corporate & Other segments. It franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, WoodSpring Suites, Everhome Suites, Cambria Hotels, and Ascend Hotel Collection. The company also develops and markets cloud-based property management software to non-franchised hoteliers. As of March 31, 2022, it had approximately 7,000 hotels with approximately 600,000 rooms in 35 countries and territories. Choice Hotels International, Inc. was founded in 1939 and is headquartered in Rockville, Maryland.