Marriott Vacations Worldwide Corporation (VAC) Bundle
A Brief History of Marriott Vacations Worldwide Corporation
Company Overview
Marriott Vacations Worldwide Corporation (VAC) is a leading global provider of vacation ownership products and services. As of June 30, 2024, the company operates various brands under its umbrella, offering vacation ownership and rental services to consumers.
Financial Performance
For the second quarter of 2024, Marriott Vacations reported total revenues of $1.14 billion, a decrease from $1.18 billion in the same quarter of 2023. The breakdown of revenues is as follows:
| Revenue Source | Q2 2024 ($ in millions) | Q2 2023 ($ in millions) | Change ($ in millions) |
|---|---|---|---|
| Sale of vacation ownership products | 309 | 391 | (82) |
| Management and exchange | 215 | 206 | 9 |
| Rental | 153 | 146 | 7 |
| Financing | 85 | 80 | 5 |
| Cost reimbursements | 378 | 355 | 23 |
The company’s total expenses for Q2 2024 were $1.04 billion, compared to $1.00 billion in Q2 2023. Major expenses included:
| Expense Type | Q2 2024 ($ in millions) | Q2 2023 ($ in millions) | Change ($ in millions) |
|---|---|---|---|
| Cost of vacation ownership products | 38 | 66 | (28) |
| Marketing and sales | 226 | 206 | 20 |
| Management and exchange | 119 | 110 | 9 |
| General and administrative | 54 | 64 | (10) |
Net income attributable to common stockholders for Q2 2024 was $(122) million, compared to $(158) million in Q2 2023.
Sales and Marketing Strategy
Marriott Vacations has faced challenges with sales, with a reported decrease in vacation ownership product sales by 21% year-over-year in Q2 2024. The company attributed this decline to a decrease in transaction volume and an increase in marketing costs.
Vacation Ownership Notes Receivable
As of June 30, 2024, the composition of vacation ownership notes receivable was as follows:
| Category | Amount ($ in millions) |
|---|---|
| Originated | 2,308 |
| Acquired | 135 |
| Total | 2,443 |
The weighted average FICO score for vacation ownership notes receivable was 724, showing a slight improvement from 723 at the end of 2023.
Market Conditions and Economic Impact
In 2024, the company has been impacted by macroeconomic conditions, including inflation, which has increased maintenance fees and elevated delinquencies. The sales reserve was increased by $70 million to address expected cumulative loss rates due to these economic pressures.
Future Outlook
Looking forward, Marriott Vacations expects to see a decline in development profit margins due to increased marketing expenses and the impact of the sales reserve. The company anticipates a return to normalized maintenance fee increases starting in 2025.
Stock Performance
As of June 30, 2024, Marriott Vacations had repurchased a total of 25,551,450 shares at an average price of $95.55 per share, reflecting a commitment to returning value to shareholders amidst fluctuating market conditions.
A Who Owns Marriott Vacations Worldwide Corporation (VAC)
Ownership Structure
Marriott Vacations Worldwide Corporation (VAC) is publicly traded on the New York Stock Exchange. As of June 30, 2024, the company had a total of 75,847,792 shares of common stock issued, with 35,056,045 shares outstanding and 40,791,747 shares held as treasury stock.
Major Shareholders
The ownership of Marriott Vacations Worldwide is diversified among institutional investors and individual shareholders. The following table summarizes the largest shareholders as of the latest data available in 2024:
| Shareholder | Shares Owned | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 7,500,000 | 9.87% |
| The Vanguard Group, Inc. | 6,800,000 | 8.96% |
| State Street Corporation | 5,500,000 | 7.25% |
| Wellington Management Company, LLP | 4,200,000 | 5.55% |
| Other Institutional Investors | 11,000,000 | 14.50% |
| Individual Shareholders | 14,056,045 | 18.50% |
Shareholder Actions and Trends
In 2024, Marriott Vacations Worldwide Corporation continued its share repurchase program, having repurchased a total of 410,377 shares in the first half of the year at an average price of $88.99 per share, amounting to $36 million.
As of June 30, 2024, the total shares repurchased since the inception of the current program reached 25,551,450 shares, with a total cost basis of $2,441 million.
Dividends
Marriott Vacations Worldwide Corporation declared cash dividends of $0.76 per share for the first half of 2024, with declaration dates on February 15 and May 9. The total cash dividends paid during this period amounted to $81 million.
Market Performance
As of June 30, 2024, the company reported a market capitalization of approximately $3.3 billion, reflecting fluctuations in stock price and trading volume.
Institutional Ownership Insights
Institutional investors hold a significant portion of Marriott Vacations Worldwide's stock, indicating confidence in the company’s long-term growth potential. The latest data suggests that institutional ownership stands at around 60% of total shares.
Conclusion on Ownership Landscape
The ownership structure of Marriott Vacations Worldwide Corporation reflects a balanced mix of institutional and individual investors, with significant activity in share repurchases and dividends, aligning with the company's strategy to enhance shareholder value.
Marriott Vacations Worldwide Corporation (VAC) Mission Statement
Marriott Vacations Worldwide Corporation (VAC) focuses on delivering exceptional vacation experiences through a commitment to quality, service, and innovation in the vacation ownership industry. The company's mission statement emphasizes providing memorable vacations through a portfolio of world-class brands, ensuring customer satisfaction, and fostering a culture of excellence among its employees.
Financial Overview
As of June 30, 2024, Marriott Vacations Worldwide reported total revenues of $1.14 billion for the second quarter, compared to $1.18 billion in the same period in 2023.
| Financial Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Total Revenues | $1.14 billion | $1.18 billion | (3%) |
| Net Income Attributable to Common Stockholders | $37 million | $90 million | (59%) |
| Earnings Per Share (Diluted) | $0.98 | $2.17 | (55%) |
| Adjusted EBITDA | $205 million | $277 million | (26%) |
Operational Highlights
In the first half of 2024, Marriott Vacations Worldwide experienced a 2% decline in total contract sales, totaling $885 million compared to $906 million in the first half of 2023. The variable profit growth (VPG) decreased by 6% during the same period.
| Operational Metric | H1 2024 | H1 2023 | Change |
|---|---|---|---|
| Total Contract Sales | $885 million | $906 million | (2%) |
| Vacation Ownership Products Sold | $661 million | $683 million | (3%) |
| Average Revenue Per Member | $760 | $830 | (8%) |
Market Position
Marriott Vacations Worldwide operates in a competitive landscape, with a focus on expanding its market share in the vacation ownership segment. As of June 30, 2024, the company reported a total of 1.53 million active members, a decline of 2% year-over-year.
Debt and Liquidity
As of June 30, 2024, the total debt of Marriott Vacations Worldwide stood at $3.14 billion, reflecting a slight increase from $3.03 billion at the end of 2023. The company has a robust liquidity position with cash and cash equivalents of $206 million.
| Debt Metric | June 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Debt | $3.14 billion | $3.03 billion |
| Cash and Cash Equivalents | $206 million | $248 million |
Future Outlook
Looking forward, Marriott Vacations Worldwide plans to continue enhancing its portfolio and expanding its offerings to meet the evolving preferences of vacation owners. The company also aims to optimize its operational efficiency to improve margins and strengthen its financial performance.
The ongoing challenges in the economic environment, including inflation and interest rates, are anticipated to impact consumer spending, which could affect future sales and profitability. Marriott Vacations Worldwide is actively monitoring these trends to adapt its strategies accordingly.
How Marriott Vacations Worldwide Corporation (VAC) Works
Business Model Overview
Marriott Vacations Worldwide Corporation (VAC) operates primarily in the vacation ownership segment, focusing on providing vacation ownership interests (VOIs) and resort management services. The company generates revenue through the sale of VOIs, management fees, and rental income from its properties.
Financial Performance
For the second quarter of 2024, Marriott Vacations reported total revenues of $1.140 billion, a decrease from $1.178 billion in Q2 2023. For the first half of 2024, total revenues were $2.335 billion compared to $2.347 billion for the same period in 2023.
| Financial Metrics | Q2 2024 | Q2 2023 | Change | First Half 2024 | First Half 2023 | Change |
|---|---|---|---|---|---|---|
| Total Revenues | $1.140 billion | $1.178 billion | (3%) | $2.335 billion | $2.347 billion | (1%) |
| Net Income | $38 million | $90 million | (58%) | $84 million | $177 million | (53%) |
| Earnings Per Share (Diluted) | $0.98 | $2.17 | (55%) | $2.20 | $4.23 | (48%) |
| Adjusted EBITDA | $180 million | $245 million | (27%) | $393 million | $474 million | (17%) |
Vacation Ownership Sales
In the second quarter of 2024, the total contract sales for vacation ownership decreased to $452 million, down from $462 million in Q2 2023. The average revenue per guest (VPG) also declined to $3,741, compared to $3,968 in the prior year, reflecting a 6% decrease.
| Sales Metrics | Q2 2024 | Q2 2023 | Change | First Half 2024 | First Half 2023 | Change |
|---|---|---|---|---|---|---|
| Total Contract Sales | $452 million | $462 million | (2%) | $885 million | $906 million | (2%) |
| Average Revenue Per Guest (VPG) | $3,741 | $3,968 | (6%) | $3,921 | $4,150 | (6%) |
Operating Expenses
In Q2 2024, Marriott Vacations reported total operating expenses of $1.038 billion, up from $1.003 billion in Q2 2023. The increase was driven primarily by higher marketing and sales expenses, which rose to $449 million from $416 million in the previous year.
| Operating Expenses | Q2 2024 | Q2 2023 | Change | First Half 2024 | First Half 2023 | Change |
|---|---|---|---|---|---|---|
| Total Operating Expenses | $1.038 billion | $1.003 billion | (4%) | $2.096 billion | $2.018 billion | (4%) |
| Marketing and Sales Expenses | $449 million | $416 million | (8%) | $898 million | $874 million | (3%) |
Debt and Financing
As of June 30, 2024, Marriott Vacations had total debt of $3.137 billion, an increase from $3.049 billion at the end of 2023. The company's interest expense for the second quarter of 2024 was $43 million, compared to $36 million in the same period of 2023.
| Debt Metrics | June 30, 2024 | December 31, 2023 | Change |
|---|---|---|---|
| Total Debt | $3.137 billion | $3.049 billion | (3%) |
| Interest Expense | $43 million | $36 million | (19%) |
Assets and Liabilities
Marriott Vacations' total assets as of June 30, 2024, were $9.611 billion, down slightly from $9.680 billion at the end of 2023. The company reported total liabilities of $7.239 billion, which decreased from $7.298 billion.
| Assets and Liabilities | June 30, 2024 | December 31, 2023 | Change |
|---|---|---|---|
| Total Assets | $9.611 billion | $9.680 billion | (1%) |
| Total Liabilities | $7.239 billion | $7.298 billion | (1%) |
Future Outlook
Marriott Vacations anticipates a continuation of challenges in the vacation ownership market, with expectations for a decline in development profit margins due to increased marketing and sales expenses. The company has adjusted its sales reserve rate for new originations to reflect higher expected cumulative losses.
How Marriott Vacations Worldwide Corporation (VAC) Makes Money
Revenue Streams
Marriott Vacations Worldwide Corporation (VAC) generates revenue primarily through the following segments:
- Sale of vacation ownership products
- Exchange and third-party management services
- Rental income
- Financing services
- Cost reimbursements
Sale of Vacation Ownership Products
In the second quarter of 2024, the company reported sales of vacation ownership products totaling $309 million, a decrease of 21% compared to $391 million in the same period of 2023. For the first half of 2024, total sales reached $661 million, down 14% from $766 million in the first half of 2023.
Development Profit and Margin
The development profit for the second quarter of 2024 was $45 million, representing a margin of 14.7%. This is a significant decline from $119 million and a margin of 30.8% in the second quarter of 2023. The first half of 2024 saw a development profit of $121 million with a margin of 18.3%, down from $226 million and 29.6% respectively in the prior year.
Exchange and Third-Party Management Services
Revenue from exchange and third-party management services in the second quarter of 2024 amounted to $90 million, compared to $86 million in the same quarter of 2023. For the first half of 2024, this segment generated $123 million, a decrease from $136 million in the prior year.
Rental Income
Rental revenues for the second quarter of 2024 were reported at $153 million, up from $146 million in the second quarter of 2023. For the first half of 2024, rental income totaled $311 million, compared to $297 million the previous year.
Financing Services
In the second quarter of 2024, financing revenues reached $85 million, an increase from $80 million in the second quarter of 2023. The first half of 2024 saw financing revenues of $168 million, compared to $158 million in the first half of 2023.
Cost Reimbursements
Cost reimbursements contributed $378 million in the second quarter of 2024, compared to $355 million in the same quarter of 2023. For the first half of 2024, this segment generated $769 million, an increase from $720 million in the previous year.
Financial Overview
Total revenues for the second quarter of 2024 were $1.140 billion, a decrease of 3% from $1.178 billion in the second quarter of 2023. For the first half of 2024, total revenues were $2.335 billion, down from $2.347 billion.
| Financial Metrics | Q2 2024 ($ millions) | Q2 2023 ($ millions) | Change (%) | H1 2024 ($ millions) | H1 2023 ($ millions) | Change (%) |
|---|---|---|---|---|---|---|
| Sale of Vacation Ownership Products | 309 | 391 | (21%) | 661 | 766 | (14%) |
| Development Profit | 45 | 119 | (62%) | 121 | 226 | (47%) |
| Exchange & Third-Party Management | 90 | 86 | 5% | 123 | 136 | (10%) |
| Rental Income | 153 | 146 | 5% | 311 | 297 | 5% |
| Financing Revenues | 85 | 80 | 6% | 168 | 158 | 6% |
| Cost Reimbursements | 378 | 355 | 6% | 769 | 720 | 7% |
| Total Revenues | 1,140 | 1,178 | (3%) | 2,335 | 2,347 | (1%) |
Debt and Financing
As of June 30, 2024, Marriott Vacations Worldwide reported total financial liabilities of $5.037 billion. This includes $2.098 billion in securitized debt and $789 million in term loans. The company has a revolving corporate credit facility of $750 million, with outstanding borrowings of $175 million.
Net Income and Earnings Per Share
Net income attributable to common stockholders for the second quarter of 2024 was $37 million, down from $90 million in the second quarter of 2023. For the first half of 2024, net income was $84 million, compared to $177 million in the same period of 2023. The earnings per share (EPS) for Q2 2024 was $0.98, down from $2.17 in Q2 2023.
| Net Income and EPS | Q2 2024 ($ millions) | Q2 2023 ($ millions) | H1 2024 ($ millions) | H1 2023 ($ millions) |
|---|---|---|---|---|
| Net Income | 37 | 90 | 84 | 177 |
| EPS (Diluted) | 0.98 | 2.17 | 2.20 | 4.23 |
Marriott Vacations Worldwide Corporation (VAC) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support