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Jun 30, 2024
Sunstone Q2 2024 Earnings Report
Sunstone reported second quarter earnings that were consistent with expectations, driven by stronger out-of-room spend and successful efficiencies and cost reductions.
Key Takeaways
Sunstone Hotel Investors reported a net income of $26.1 million for the second quarter of 2024, compared to $43.1 million in the same period of 2023. Comparable RevPAR decreased by 2.0% to $232.59. Adjusted EBITDAre decreased by 13.6% to $73.5 million. The company is focused on positioning for outsized growth in 2025 and beyond, with renovations and rebranding underway.
Net income was $26.1 million, compared to $43.1 million in the second quarter of 2023.
Comparable RevPAR decreased 2.0% to $232.59; excluding The Confidante Miami Beach, RevPAR increased 0.4%.
Adjusted EBITDAre decreased 13.6% to $73.5 million.
Adjusted FFO attributable to common stockholders per diluted share decreased 15.2% to $0.28.
Sunstone
Sunstone
Sunstone Revenue by Geographic Location
Revenue by Geographic Location
Total Portfolio Revenue
CapyFin.com Forward Guidance
The company’s updated full year guidance is impacted by a slower than anticipated recovery in Maui, primarily during the third quarter, and the completion of the renovation work at the recently converted Marriott Long Beach Downtown, which impacted results in the second quarter and extended into the start of the third quarter.
Positive Outlook
- Full year interest income of approximately $11 million to $12 million, an increase of $1 million relative to the Company’s prior estimate.
- Full year corporate overhead expense (excluding deferred stock amortization) of approximately $21 million to $22 million.
- Full year interest expense of approximately $49 million to $52 million, including approximately $3 million in amortization of deferred financing costs, and a $2 million noncash reduction to interest expense from derivatives.
- Excluding the noncash interest from derivatives, the updated range is $1 million lower than the Company’s prior estimate.
- The Confidante Miami Beach is expected to reopen as Andaz Miami Beach by the end of the fourth quarter of 2024.
Challenges Ahead
- The Company’s updated full year guidance is impacted by a slower than anticipated recovery in Maui, primarily during the third quarter.
- The completion of the renovation work at the recently converted Marriott Long Beach Downtown, which impacted results in the second quarter and extended into the start of the third quarter.
- Full year total Adjusted EBITDAre displacement of approximately $15 million to $16 million in connection with planned capital investments, an increase of $1.5 million relative to the Company’s prior estimate.
- Full year preferred stock dividends of approximately $15 million to $16 million, which includes the Series G, H and I cumulative redeemable preferred stock.
- The Company currently anticipates that the resort will generate an EBITDAre loss of approximately $3 million to $5 million, excluding pre-opening and certain capitalized costs, in 2024 as the comprehensive transformation is completed.