In their third quarter 2023 earnings call, Anywhere Real Estate reported revenues of $1.6 billion and operating EBITDA of $107 million, demonstrating resilience in a challenging housing market. The company reduced its debt by nearly $300 million while achieving $60 million in quarterly cost savings. Despite a 13% year-over-year drop in transaction volume, in line with market trends, the real estate firm remains optimistic about its strategic progress and future value delivery.
Key takeaways from the earnings call include:
- Significant debt reduction: The company reduced its debt by $281 million through bond exchanges, open market repurchases, and repayment of a portion of its revolver balance. Since 2019, net debt has been reduced by almost $900 million.
- Performance across businesses: The Anywhere Brands business generated $155 million in operating EBITDA, while the Anywhere Advisors and Anywhere Integrated Services businesses reported negative $8 million and $2 million in operating EBITDA, respectively.
- Cost savings: The company achieved $160 million in savings year-to-date and aims to deliver an additional $200 million in P&L cost savings in 2023.
- Transaction volume and market trends: Transaction volumes are expected to decline by 15-20% in 2023, with slight pressure on splits. The company remains optimistic despite these challenging market conditions.
- Litigation settlement: The company entered into a nationwide settlement for seller antitrust litigation, with a settlement amount of $83.5 million.
According to InvestingPro data, the company has a market cap of 508.23M USD and its revenue for LTM2023.Q2 stands at 5933M USD, which shows a decline of -25.25% compared to the previous year. The company's share price has also witnessed a significant drop over the past few months, with a 1-month price total return of -43.79%. This aligns with the InvestingPro tip that the stock has taken a big hit over the last month.
Charlotte Simonelli, an executive at Anywhere Real Estate, detailed the company's financial performance and strategic plans. She highlighted the company's focus on debt reduction, achieved through bond exchanges, open market repurchases, and repayment of a portion of its revolver balance. The company has improved its capital structure and reduced net debt by almost $900 million since 2019.
Simonelli also discussed the performance of the company's different businesses. The Anywhere Brands business generated $155 million in operating EBITDA, despite a challenging housing market. The Anywhere Advisors business reported negative $8 million in operating EBITDA, primarily due to lower volume. The Anywhere Integrated Services business reported $2 million in operating EBITDA, a decline of $7 million year-over-year.
The company's CEO discussed the future outlook and potential cost savings through the use of generative AI technology. Despite the challenging market, the company remains optimistic and believes its strategic progress positions it for future success. The CEO also mentioned that they expect lower litigation expenses in the future, though no specific amount was disclosed.
Charlotte Simonelli, CFO, mentioned that the company had entered into a settlement for seller antitrust litigation on a nationwide basis, with a settlement amount of $83.5 million. The company expects to pay $10 million this year and the remainder in 2024.
Despite the challenging market conditions, Anywhere Real Estate remains focused on simplifying operations, reducing debt, and differentiating themselves in the market. The company is also investing in its franchise business, integrating support services, and utilizing AI technology for marketing and documentation purposes.
InvestingPro tips suggest that the company's management has been aggressively buying back shares, which could signal confidence in the company's future. However, the company's declining trend in earnings per share and the fact that analysts do not anticipate the company will be profitable this year are areas of concern. For more insights like these, consider subscribing to InvestingPro, which offers numerous additional tips and real-time metrics to aid in investment decision-making.
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