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WEST PALM BEACH, Fla. - Chatham Lodging Trust (NYSE: CLDT), a real estate investment trust focused on upscale, extended-stay hotels, announced its first-quarter results for the period ending March 31, 2025, reflecting a net loss to common shareholders but an increase in revenue per available room (RevPAR) and a raised quarterly dividend. According to InvestingPro data, the company, currently valued at $351 million, appears undervalued based on multiple metrics, including its price-to-book ratio of 0.46.
The REIT reported a net loss applicable to common shareholders of $1 million, an improvement from the $7 million net loss in the first quarter of 2024. The loss per diluted common share narrowed to $(0.01) from $(0.15) year-over-year. InvestingPro analysis reveals that while the company maintains a ’GOOD’ overall Financial Health Score of 2.89, analysts anticipate continued challenges with profitability this year. For deeper insights into CLDT’s financial health and valuation metrics, subscribers can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
RevPAR for the 35 comparable hotels in the portfolio rose 4 percent to $127 compared to the first quarter of 2024. Occupancy increased by 4 percent to 72 percent, while the average daily rate (ADR) remained unchanged at $176. Chatham’s Silicon Valley hotels outperformed with an 8 percent RevPAR increase.
Gross operating profit (GOP) margins improved slightly to 39 percent, but hotel EBITDA margins declined by 30 basis points to 31 percent. Adjusted EBITDA decreased by $1 million to $18 million, and adjusted funds from operations (AFFO) fell to $7 million from $8 million in the prior-year quarter. The AFFO per diluted share was $0.14, down from $0.16.
Chatham raised its quarterly common dividend by 29 percent to $0.09 per share, bringing the annual dividend yield to 5.14%. The company also closed on the sale of two hotels for $31 million and, after the quarter’s end, sold the last of five contracted hotels for $23 million, totaling $83 million in gross proceeds. With a beta of 1.43, the stock shows higher volatility than the broader market, making it particularly important for investors to monitor its performance closely.
The board approved a $25 million share repurchase program, with no set expiration, signaling confidence in the company’s financial position and commitment to enhancing shareholder value. This follows a significant reduction in net debt ratio by approximately 50 percent since 2020, reaching the lowest levels in over a decade.
Despite a strong start to the quarter, with RevPAR growth of 5 percent in January and 7 percent in February, March ended flat due to tariff policies and cuts in government spending. April saw a 4 percent RevPAR decline, influenced by the uncertain economic environment and religious holidays impacting business travel. However, May’s RevPAR is trending better, with forecasts ranging from flat to slightly positive.
The company’s guidance anticipates a RevPAR decline of 0.5 to 2.0 percent for the second quarter, with a projected range of -1% to +1 percent for the second half of the year. InvestingPro subscribers can access additional exclusive insights, including 7 more ProTips and detailed analyst forecasts, to better understand the company’s growth trajectory and investment potential.
This article is based on a press release statement and the financial results are in accordance with GAAP.
In other recent news, Chatham Lodging Trust reported its fourth-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of -0.08, compared to the forecasted -0.14. The company also reported revenue of $75.11 million, slightly above the anticipated $74.57 million. Chatham Lodging Trust demonstrated strong financial performance, achieving a Hotel EBITDA of $24.3 million and an adjusted EBITDA of $21.4 million. Additionally, the company reduced its net debt by $29 million in 2024 by repaying $297 million of maturing debt. Stifel analysts recently adjusted their outlook on Chatham Lodging Trust by lowering the price target to $9.50 from $11.00 while maintaining a Buy rating. This adjustment reflects revised forecasts for the company’s financial performance in 2025 and 2026. Despite these revisions, Stifel maintains a positive outlook on the stock, indicating potential value despite near-term challenges.
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