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Investing.com -- Wyndham Hotels & Resorts Inc (NYSE:WH) shares surged 4.3% after the hotel franchisor reported second-quarter earnings that exceeded analyst expectations, driven by strong growth in ancillary revenues and development activity.
The company posted adjusted earnings per share of $1.33, significantly above the analyst estimate of $1.16. Revenue came in at $397 million, surpassing the consensus forecast of $386.64 million. Ancillary revenues jumped 19% compared to the second quarter of 2024, while the company’s development pipeline grew to a record 255,000 rooms, up 5% YoY.
Wyndham’s global system expanded by 4% YoY to 846,700 rooms, with the company awarding 229 development contracts globally, representing a 40% increase from the previous year. The stock’s strong performance reflects investor confidence in these growth metrics despite a softer domestic RevPAR environment, which declined 4% in the U.S.
"We delivered another solid quarter growing our global system by 4%, expanding our development pipeline by 5%, increasing our ancillary revenues by 19%, and continuing to execute our strategy focused on higher FeePAR segments and markets," said Geoff Ballotti, president and chief executive officer.
Adjusted EBITDA increased 10% YoY to $195 million, or 5% on a comparable basis. The company returned $109 million to shareholders through $77 million in share repurchases and quarterly cash dividends of $0.41 per share.
For fiscal year 2025, Wyndham raised its adjusted EPS outlook to $4.60-$4.78, compared to the consensus estimate of $4.68, and increased the low end of its year-over-year rooms growth outlook to 4.0%-4.6%.
The company maintained its net debt leverage ratio at 3.5 times as of June 30, 2025, in line with its target range of 3 to 4 times.
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