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NEW YORK - Choice Hotels International (NYSE:CHH) reported better-than-expected second quarter earnings on Wednesday, despite revenue coming in slightly below analyst estimates as the company navigated a softer domestic travel environment.
The company’s shares rose 0.85% in pre-market trading following the announcement.
The global lodging franchisor posted adjusted earnings per share of $1.92 for the second quarter, exceeding analyst expectations of $1.89. However, revenue came in at $426 million, falling short of the $430.18 million consensus estimate.
Choice Hotels achieved record second quarter adjusted EBITDA of $165 million, representing a 2% increase compared to the same period in 2024. Adjusted diluted EPS grew 4% YoY to reach a second quarter record.
The company’s performance came despite challenging domestic travel conditions, with domestic RevPAR decreasing by 2.9% compared to the same period last year. Choice attributed this decline partly to difficult comparisons due to the timing of Easter and eclipse-related travel in 2024.
"Choice Hotels delivered another quarter of record financial performance despite a softer domestic RevPAR environment, underscoring the successful execution and diversification of our growth strategy," said Patrick Pacious, President and CEO.
The company reported strong international growth, with net international rooms increasing by 5.0% YoY, highlighted by a 15% increase in openings. Choice also expanded its global net rooms system size by 2.1%, including 3.0% growth for its more revenue-intense portfolio.
For the full year 2025, Choice Hotels forecasts adjusted earnings per share between $6.88 and $7.20, compared to analyst expectations of $7.04. The company also adjusted its RevPAR outlook downward to reflect "a more moderate domestic expectation amidst a changing macroeconomic backdrop."
In July, Choice acquired the remaining 50% interest in Choice Hotels Canada for approximately $112 million, which the company expects will generate about $18 million in EBITDA for full year 2025.
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