Summary
Marriott International reported a significant decline in financial performance for the first quarter of 2020, primarily driven by the unprecedented impact of the COVID-19 pandemic. Revenues plummeted across all segments, with gross fee revenues down 30% year-over-year. Net income fell to $31 million from $375 million in the prior year, and diluted earnings per share dropped to $0.09 from $1.09. The company experienced substantial RevPAR declines, with worldwide comparable systemwide RevPAR down approximately 60% in March 2020. In response, Marriott has implemented aggressive cost-saving measures, including a substantial reduction in corporate G&A costs and system-wide spending. The company also bolstered its liquidity by drawing down its credit facility and issuing new debt, while suspending share repurchases and dividends. Despite the severe downturn, Marriott is focusing on preserving financial flexibility and navigating the crisis. Management notes that while the duration and full impact of COVID-19 remain uncertain, they are adapting their strategies. The company has seen some signs of stabilization in certain regions like Greater China, but overall, the outlook for the second quarter is expected to be significantly impacted. Investors should closely monitor the pace of travel recovery, the effectiveness of cost-containment strategies, and the company's ability to manage its debt obligations during this challenging period.
Financial Highlights
45 data points| Revenue | $4.68B |
| Operating Expenses | $4.57B |
| Operating Income | $114.00M |
| Interest Expense | $93.00M |
| Net Income | $31.00M |
| EPS (Basic) | $0.10 |
| EPS (Diluted) | $0.09 |
| Shares Outstanding (Basic) | 325.40M |
| Shares Outstanding (Diluted) | 327.40M |
Key Highlights
- 1First quarter 2020 net income significantly decreased to $31 million from $375 million in the prior year period, reflecting the severe impact of COVID-19.
- 2Gross fee revenues declined 30% to $629 million compared to $895 million in Q1 2019, primarily due to lower demand caused by the pandemic.
- 3Worldwide comparable systemwide RevPAR saw a dramatic decrease of approximately 60% in March 2020 due to COVID-19 travel restrictions and reduced demand.
- 4Marriott bolstered its liquidity by drawing $4.5 billion on its credit facility and issuing $1.6 billion in Series EE Notes.
- 5The company has implemented significant cost-reduction measures, reducing corporate G&A run rate by approximately 30% and aiming for a two-thirds reduction in centralized, system-funded reimbursed expenses.
- 6Share repurchases and dividends have been suspended to conserve cash.
- 7The company reported $1.76 billion in cash and equivalents as of March 31, 2020, an increase from $225 million at year-end 2019 due to liquidity-enhancing activities.