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Marriott Vacations Worldwide reported a sharp drop in first-quarter profit, with net income attributable to common stockholders falling to $22 million from $56 million in the same period a year earlier, the company said. Diluted earnings per share came in at $0.64, down from $1.46 a year ago.
Adjusted net income declined 34% to $43 million, and adjusted diluted earnings per share fell 25% to $1.24. Adjusted EBITDA dropped to $161 million from $192 million in the prior year. Contract sales slipped 2% to $411 million.
The company attributed the weaker results to lower contract sales, higher marketing and sales costs, increased product costs, and greater unsold maintenance fee expenses. General and administrative costs also rose $3 million, largely due to severance charges. Revenue at Aqua-Aston also weighed on results.
The decline in tours was tied to the company's planned moves to focus on higher profitability in the Asia-Pacific region and a decision to limit tours to customers with FICO scores below 640. Excluding Asia-Pacific, tours fell 1% year-over-year.
Marriott Vacations reiterated its full-year adjusted EBITDA guidance. For the second quarter, it expects contract sales to grow 4% to 8% and adjusted EBITDA to land between $187 million and $202 million.
CEO Matt Avril said in a statement that results came in as anticipated. "Contract sales and Adjusted EBITDA were lower in the first quarter, consistent with how we expected the year to unfold," Avril said in a statement, adding that leadership changes, new hires in sales and marketing, and cost reductions are expected to benefit results in the second half of the year.
On the asset disposal front, the company closed the sale of the Westin Cancun hotel in the quarter, generating $50 million in proceeds. It also listed additional non-core assets expected to produce more than $125 million in gross proceeds this year. The company remains on track to generate $200 million to $250 million in total gross proceeds from non-core asset sales by the end of 2027.
Marriott Vacations ended the quarter with $854 million in liquidity, including $268 million in cash and $478 million of available capacity under its revolving corporate credit facility. The company carried $3.3 billion in corporate debt and $2.3 billion in non-recourse debt tied to securitized vacation ownership notes receivable.