What Happened?
Shares of vacation ownership company Marriott Vacations (NYSE: VAC) fell 3.6% in the afternoon session after the company reported second-quarter earnings and revenue that surpassed Wall Street's expectations. The timeshare company reported adjusted earnings per share of $1.96, a 78% increase from the prior year, which surpassed analyst forecasts. Revenue also grew 9% year-over-year to $1.25 billion, beating expectations. Analysts noted that the better-than-feared results were driven by lower product costs and a reduced tax rate. Despite the strong profit beat, management pointed to subdued contract sales growth and continued softness in spending per guest.
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What Is The Market Telling Us
Marriott Vacations’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock gained 5% on the news that a new trade agreement between the United States and Japan spurred a broad market rally. The positive sentiment swept across markets after it was announced the U.S. and Japan had reached a new trade deal. The agreement included a 15% tariff on Japanese goods imported into the U.S. and a commitment from Japan to invest $550 billion in the U.S. and open its markets to American cars and agricultural products. This development boosted investor confidence and contributed to a widespread rally, lifting stocks across many sectors. The Dow Jones Industrial Average and the S&P 500 both posted gains, creating a favorable environment that likely benefited individual stocks.
Marriott Vacations is down 17.4% since the beginning of the year, and at $72.22 per share, it is trading 27.2% below its 52-week high of $99.25 from November 2024. Investors who bought $1,000 worth of Marriott Vacations’s shares 5 years ago would now be looking at an investment worth $822.82.
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