Choice Hotels Beats in Q2, Lifts Adjusted EBITDA and EPS Outlook Despite Net Income Miss
CHH sits 32% above its 52-week low of $84.035.
Summary
Choice Hotels reported Q2 2026 adjusted EPS of $2.02, beating estimates, and raised full-year adjusted EBITDA and EPS guidance. U.S. RevPAR grew 1.3% and global net rooms expanded 2.6%. Net income guidance was lowered due to higher marketing and interest costs. The company plans to begin selling owned hotels in 2027.
Key Events · Earnings and Guidance · CHH
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Q2 Earnings Beat
Adjusted diluted EPS of $2.02 exceeded expectations, driven by 6% growth in franchise and management fees and a 1.3% increase in U.S. RevPAR.
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Guidance Raised for Adjusted Metrics
Full-year adjusted EBITDA guidance raised to $635M–$650M (from $632M–$647M) and adjusted diluted EPS to $6.86–$7.10 (from $6.92–$7.14), reflecting improved RevPAR and net rooms growth.
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Net Income Guidance Lowered
Full-year net income guidance cut to $230M–$241M (from $265M–$275M) due to higher marketing and reservation system expenses, increased interest expense, and a higher effective tax rate.
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Global Net Rooms Growth Accelerates
Global net rooms grew 2.6% year-over-year, with extended stay net rooms up 13.0% and international net rooms up 12.5%, supported by a 27% increase in U.S. room openings.
Analysis · CHH · Real Estate & Construction
Choice Hotels posted a top-and-bottom-line beat for the second quarter, with adjusted EBITDA reaching $175M and adjusted diluted EPS of $2.02 coming in ahead of expectations. U.S. RevPAR rose 1.3%, while global net rooms expanded 2.6%, fueled by strength in extended stay and international segments. Management raised full-year guidance for adjusted EBITDA and adjusted diluted EPS, underscoring confidence in operational momentum. At the same time, net income guidance was trimmed, reflecting higher marketing investments and interest expense. The company also announced plans to begin selling owned hotels in early 2027, signaling a pivot toward a more asset-light model. The mixed guidance—raising adjusted metrics while cutting net income—captures both operational strength and cost pressures, making this a nuanced but important update for investors.
At the time of this filing, CHH was trading at $111.00 on NYSE in the Real Estate & Construction sector, with a market capitalization of approximately $4.9B. The 52-week trading range was $84.04 to $127.27. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.