Denison Mines announces $250 million convertible notes offering
Introduction & Market Context
RLJ Lodging Trust (NYSE:RLJ), a hotel real estate investment trust with 94 properties and 20,982 rooms, presented its Q2 2025 financial results on August 8, 2025. The company reported mixed performance with a slight decline in key metrics while exceeding earnings per share expectations. Following the earnings announcement, RLJ’s stock declined by 3.6% to close at $7.37, though pre-market trading showed a modest recovery of 0.54%.
The company posted an EPS of $0.15, surpassing the forecasted $0.11 by 36.36%. However, revenue came in slightly below expectations at $363.1 million compared to the anticipated $364.62 million. The results reflect a challenging operating environment with varying performance across geographic markets.
Quarterly Performance Highlights
RLJ Lodging Trust’s Q2 2025 results showed modest declines across key performance indicators compared to the same period in 2024. Occupancy decreased by 1.6% year-over-year to 75.5%, while Average Daily Rate (ADR) fell by 0.5% to $205.27. Revenue per Available Room (RevPAR), a critical industry metric, declined by 2.1% to $155.08.
Total (EPA:TTEF) revenue for Q2 2025 reached $363.1 million, down from $368.4 million in Q2 2024. Comparable Hotel EBITDA was $113.0 million with a margin of 31.1%, compared to $118.0 million and 32.0% in the prior year period.
For the first half of 2025, the company’s year-to-date performance showed similar trends, with occupancy down 1.1% to 72.4%, though ADR increased slightly by 0.7% to $204.82. Overall RevPAR for the six-month period decreased marginally by 0.3% to $148.19.
Geographic Performance Analysis
RLJ’s portfolio performance varied significantly by market, with certain urban destinations showing resilience while others experienced more pronounced declines. The company’s detailed market breakdown reveals these geographic disparities.
Charleston emerged as a top performer with a 2.0% RevPAR growth in Q2 2025, driven by a strong ADR increase of 2.7% despite a slight occupancy decline. New York City also showed positive momentum with RevPAR growing 1.2% year-over-year, supported by a robust 4.0% ADR increase that offset a 2.7% occupancy decline.
Conversely, Washington, DC experienced the most significant challenges with RevPAR declining 7.3% year-over-year, affected by both occupancy (-3.2%) and ADR (-4.2%) decreases. Louisville also faced headwinds with a 5.2% RevPAR decline.
According to the earnings call, urban markets, particularly San Francisco, outperformed with a 20% RevPAR increase. The company also completed seven hotel conversions during the quarter, which achieved a 10% RevPAR growth, though these specific details were not highlighted in the presentation slides.
Financial Position & Debt Structure
RLJ Lodging Trust maintains a solid financial position with a well-structured debt maturity schedule. The company reported a market capitalization of $1.1 billion and net debt outstanding of $1.9 billion, resulting in a total enterprise value of $3.3 billion.
The debt maturity profile is favorable with no debt maturing in 2025, providing near-term financial flexibility. The company’s debt maturities are well-distributed, with 31% maturing in 2026 ($181 million secured debt and $500 million term loans), 10% in 2028, 46% in 2029, and 13% in 2030. This staggered approach helps mitigate refinancing risk.
The company’s trailing twelve months comparable hotel EBITDA reached $389.3 million. The reconciliation from net income to comparable hotel EBITDA shows the various adjustments made to arrive at this figure, including depreciation and amortization of $182.4 million and interest expense (net of interest income) of $97.3 million.
Forward Outlook
Looking ahead, RLJ anticipates a softer third quarter in 2025, with improvements expected in the fourth quarter due to favorable holiday shifts and stronger citywide calendars. The company projects modest expense growth of around 2% and remains optimistic about fundamentals for 2026.
Despite the challenging operating environment, RLJ maintains a healthy dividend yield of 8.14% and has consistently maintained dividend payments for 15 consecutive years, according to the earnings report.
CEO Leslie Hale emphasized the company’s strong urban hotel portfolio as a key driver of performance, stating, "Our urban hotels continue to be the key driver of our portfolio." This focus on urban markets appears to be yielding positive results in certain locations, even as overall performance shows slight declines.
The company’s current stock price of $7.37 sits within its 52-week range of $6.16 to $10.84, suggesting potential upside if management’s expectations for improved performance in Q4 2025 and beyond materialize.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.