Marriott is set to report next Monday, August 6th, and there might be some problems for the hospitality provider. Estimize predicts that the EPS will increase to $1.39 which is a 23% increase year over year (YoY) and a two cent increase from the previous quarter (Q1 2018). This is a sign of growth for the company and demonstrates greater dollar yield per share.
Revenue is the main concern as it decreased significantly last quarter (Q1 2018) to $5.0 billion—significantly lower than predicted estimates. Estimize predicts that Marriott revenue will be at $5.99 billion this quarter (Q2 2018) which is a 3% (YoY) increase. Given that last quarter (Q1 2018) revenue was lower than expected, the Estimize consensus predicts a large bump in revenue this quarter (Q2 2018). If last quarter’s trend continues though, Marriott could be in a bit of trouble.
To look for new, innovative ways into its market, Marriott is, according to The Motley Fool, “exploring several innovative strategies to continue to protect and expand its market share”. (1) In an experiment, Marriott—in conjunction with a London based company—is working on “bring[ing] Marriott-level service and quality to travelers seeking a curated home-stay experience”. (1) With this, Marriott hopes to curtail the pressure from Airbnb, a company which mainly provides this “home-stay” experience. Other innovations include a partnership with Chinese-based tech giant Alibaba and an investment in cruise ships. These two investments might prove costly in the short-term but could yield long-term benefits.
Overall, Marriott should be a solid bet. Last quarter’s revenue drop seems more like an outlier than anything else. So, will Marriott pull through its recent revenue slump? It’s definitely looking that way.
Photo Credit: Bryan Fulmore
1: Sharma, Asit. “Marriott Looks to Innovation for Growth.” The Motley Fool, The Motley Fool, 4 June 2018, www.fool.com/investing/2018/06/04/marriott-looks-to-innovation-for-growth.aspx.
