WYND - Earnings call transcript Q2 2019

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Operator

Good morning, and welcome to Wyndham Destinations’ Second Quarter 2019 Earnings Conference Call. [Operator instructions] As a reminder, ladies and gentlemen, this conference call is being recorded.

If you do not agree with these terms, please disconnect at this time. Thank you.

I would now like to turn the call over to Chris Agnew. ahead. go Please

Chris Agnew

morning Good Thanks and Keith. welcome.

forward-looking begin, that you we could are materially in effective to made of forward-looking statements. remind discussions this differ the indicated those like only our from and morning today results the statements Before Actual we’d statements, today. will as forward-looking include

reconciliation that in no results a to actual website obligation or the our We can cause filings. of publicly undertake you revise these on investor.wyndhamdestinations.com. at measures today’s are discussed financial could update to statements. SEC And earnings our The discussed factors and call non-GAAP differ press find in release our

And This then discuss an morning, our our our on strategic greater and Chief Brown, results. Chief President and detail and overview Hug, Officer, Financial Executive Mike Officer provide our our will on outlook. our will results initiatives provide quarter Michael second

questions. Following these to respond remarks, your to we be available will

pleased over With call that, the am to I turn Brown. Michael to

Michael Brown

Good thank Chris. everyone you, and joining you us morning Thank today. for

As our Destinations. fourth our this as anniversary, we call one Wyndham celebrate marks year

returned spin capital XXXX. to are mid-single-digit the shareholders. now this progress executing great company. in to first million significant flow On to put of and have progress organic to generate as public of announced growth in and strong point, accomplishments the capital vacations spin return deliver since in $XXX the in made members year cash a and since consistent to free last and our June shareholders we our we that strategy proud are confirms The achieved XXXX to We on the owners was

adjusted above the and EPS Destinations range XX% our Wyndham of reported $X.XX. than with EBITDA $XXX of million was morning, adjusted year. higher this guidance and EPS prior another strong Earlier quarter

strength were loss year-over-year with in in sales Blue of operating sequential Thread pleased the and owner loan provision and particular rate. the our the in arrivals, improvement growth performance We our

guidance a to cash increasing $XXX range $X.XX million outlook range full are to to for our EPS flow increasing adjusted million. year are $X.XX. And adjusted of to We also free we $XXX our

EPS range for EBITDA full the growth at million $X,XXX million. and reaffirming new adjusted Our year-over-year guidance we represents of our to are XX% $XXX outlook year midpoint

up our Vacation sale this small business million of equity part either of million announced a is is remaining morning, we Rentals. Vacasa cash review to the believe strategic receive equity $XX transaction. and company will or the The The for cash result Wyndham will to the of fall. at buyer we Vacasa their to we of concluded a as closing, expected sale of ideal million this close financing in the in balance $XX business We at As of closing. as be seller comprised at Vacasa the interest and $XXX

strategic dedicated for ownership and the discussed, previously to on business in our core allow focus the exchange. rationale a we As growth was review of vacation

performance financial total gross strong result this growth X% quarter and of Our in America. was X% in VOI solid North of sales a

owner significantly increased owner and increased from also We engagement benefited sales. delivered higher owner which arrivals

slightly a quarter loss than in better and their performance RCI loan was consistent Furthering the second provision performance. expected

turn now the Let are I decisions loan loss reduce right continued to me discuss term. all provisions making believe to the provision. long we to the for

demonstrates and quarter-to-quarter, fact guidance This quarter we year not progress full affirms the that although is best making. measured our this are

at owner engagements. length discuss importance me heard the have You of

in in owner the quarter higher of resorts. have XXX prior to quarter. being led increase of XX,XXX This basis is our resulted first the than second more XX,XXX and occupancy arrivals also efforts net on American North in an the back numerous year Our points arrivals

prior Thread Sales Thread year. sales XX% initiatives flow. year-over-year increase higher in in by driven excellent volume saw performance tour Blue our than a increased also Blue this Year-to-date, We quarter. are XX% XX%

the in site tour broadly and in and sales has to half quarter our new international quarter intentional under-performance in in impacts partners. began slightly tours change fourth the realign Tour delay to more over we of Nashville lighter our flow which we quarter lap marketing tour expectations. finite to partner in X% with about will flow are first Speaking issues North mix since been we flow, America. year total from X% the of we working in mix the one Nashville, prior due increased a as and are the These XXXX marketing our our closely have opened tour international fourth and

the and guided We growth are for of towards the full now confident we X% that growth likely in to year. the half the half are second X% we lower will accelerate that

natural of the sales a reduction One owner total in a sales. percent stronger is mix sales arrivals our new owner as and outcomes of from

We owner XXXX. and sales up year-over-year expect that be being a two-year new period to XXXX and over

sales owner mix new increase to expect We points. XXX basis

XX% of represented our This basis sales. continue at year. of new which quarter Millennials, strong We and to the an see second for Gen sales XXX points combined from owner prior Xers increase

essence is brand new One deliver distinctly of Powerful the with to clubs, to identities. the to modern flagship place strategies we that life each brands have great opportunities, to owner At development of feel an drive being more end WorldMark of owners we they brings timeshare by establish owner our continue also new the engagement. but in attract and look May, exciting Wyndham launched increased of an Vacation Clubs Wyndham. our identities Club for brand and

Wyndham tagline speaks owners brands lens their with through your a for is now destinations. new live about owning how the connects and to refreshed it’s at accretive travel passions cycle have owner’s life it touch We our that a timeshare, brand every Club list – perspective. from both just across not point and for to is appeals the bucket exciting digital The

the which more to backdrop catalyst brand’s ones, to ongoing for new For share. WorldMark owners, time the and tagline serve traditions vacation create as leads the of to

by our The directly was feedback WorldMark opening our Wyndham positive. I overwhelmingly fact, in Oregon opportunity speak recently the In had of Portland, owners. with grand and attended to the

timeshare at brand branding call; life the we’ll this the great are see discussed We along we market These with urban efforts. enhance first and this to to continue to the quarter the was owner engagement CRM on our first comes location. us it in company for initiatives new changes

announcement sale rentals, worked of and everyone business. thank Vacation like of who was review the I to exchange of Rentals our strategic Wyndham initiative the team In the key a would and on the on

our making also business. exchange on side are We strides of tremendous the

the part supply RCI to more technology as year. plan half of the its taken have capital on experience. initiatives in that existing with Several focus is and investing member enhancements improving hold the of and second come

to its for XX in to and second continues RCI look for XX destination addition, portfolio. new the or options new properties its In affiliates new members added quarter

we capital continue year-to-date through the end commitment to July. demonstrate with to regard returning dividends to with to shareholders our cash $XXX million of Lastly, share repurchases allocation, and in

outlook Our same. the capital remains allocation

our believe the to share generate of dividend, absence confidence committed transactions best the excess are of to ability compelling We quarterly free in consistently flow and we our repurchases. cash expresses remains which use in free cash flow

to our To second conclude, quarter. like reinforce major takeaways three from I’d

tangible owner around very delivered quarter increase the engagement. First results

incremental sell on free optimizing Second, Wyndham focus Vacation driving balance our highlights and sheet our the Rentals cash to flow. announcement

EBITDA and reaffirming year, our Lastly, adjusted free are regarding adjusted EPS our increasing for outlook we guidance the guidance. adjusted cash and full flow

the over to hand to With that, Hug. Mike? I call Mike like would

Mike Hug

everyone. second good results will our discuss primarily morning and you, outlook. our My Today, and quarter focused adjusted I’d be XXXX Thank like on results. our to comments Michael

find amounts our including You to reconciliations earnings our can further and complete GAAP in numbers. adjusted results release of adjusted

an was EBITDA increase basis $X.XX, the diluted Adjusted adjusted quarter XX% adjusted and the EBITDA the margin an increased EPS year was over X% second adjusted of XX.X% in adjusted over X% over margin year. prior Our $XXX increase our increased was year. prior Year-to-date, the million, and prior XX points of quarter. EBITDA EBITDA

Adjusted EPS the the in year. XX% over half prior first increased

increase year-over-year X% a VOI to tours and gross quarter VPG. in in X% Second sales with a million increase X% $XXX increased

Adjusted up slightly in higher in a increased of partially driven certain was vacation costs. offset costs growth and X% basis, fixed marketing lag segment of marketing net costs marketing EBITDA associated channels. increased by growth as X% tours rate our with On a ramp revenue by ownership

expect year. tour the Michael growth accelerate to of the half we second As mentioned, in

improved loss a the The quarter. and provision second as for VOI year-over-year sequentially in XX.X% percentage to sales gross of loan

year-over-year prior year gross the $X.X million billion portfolio to with increase our to receivables and increased X% higher provision over the attributable increased $X Our entire sales. loss for loan VOI

growth. half actions us X% of the revenue are We the of in expect second member, due revenue allowing taking remain improvement around we member and rental provision we per and to in for sequential by the year our confident in partially to year. the XX.X% quarter in full Exchange decreased guidance offset the reduce achieve to decrease the to continue

continues prior revenue X% revenue largely member increased supply due decline expense. and The EBITDA product Adjusted challenges. over lower other to be the to member by year in inventory driven G&A mix, lower per

per revenue first continues year. last member the sequential compared in we of to be saw the improvement half half of down, trend the in to year-over-year second Although XXXX

this going some mentioned. forward result We expect and the of as in improvement XXXX Michael remainder continued trend for a of of initiatives the

$XXX the adjusted of Our XXXX XXXX. half first continuing $XXX first million operations flow half million for of from the was in cash free versus

a we in $XXX for We Last year in are the completed one flow advance coupon securitizations, one the free of outlook third and confident million transaction third additional quarter. with our quarter average X.XX% XX%. two the of with rate cash week, securitization, and this in quarter weighted fourth

multiple was our demand, able pleased again the which the was ABS with upsized markets. transaction by access were times this track record on We million. size oversubscribed. This of execution, investor being very confirms transaction to proven Based $XX

quarter $X.X we with on targeted corporate in $X.X our within leverage of capital allocation as related of billion the excludes at first identified our sale to quarter to X.X increase times, lowest nonrecourse was equivalents second receivables. the of related rentals payments sheet, leverage debt our at net million debt consistent times balance remained expected that of to our call. XX, With cash to we our $XXX and X.XX of with in securitized The the cash flow had which free billion quarter. the our the business June quarter with second leverage cash being vacation our and European X Turning

on We million. average to of share continued May the net with shares. the share of weighted share quarter. month bought cash By as And second of total be the with $X.XX of July, X.X we XX. we anticipate we Michael per back at the June year, at was will times. repurchases mentioned, stock declared of We shareholders XX, the $XX million per a share million repurchases $XX price X.X paid around In $XX.XX on which dividend a leverage continued end of a in for

year. me Now to for the turn remainder the let outlook our of

the in to $X,XXX of be to guidance EBIDTA adjusted range $XXX reaffirming are We million. million

We count. expense $X.XX to diluted are increasing operations adjusted lower from outlook range and EPS continuing $X.XX, for from primarily share $X.XX to our $X.XX interest of to on

As reminder, no on for XXXX. EPS million is diluted based a further June outlook share our assumes count after share repurchases which diluted of shares, XX, a XX.X

the diluted adjusted continuing $X.XX third expect EPS to range of XXXX, to from we from $X.XX. For quarter operations

to couple out third on items A of call the quarter.

by sales adjusted expected are EPS third be quarter EBITDA our $X.XX. and First, million cost approximately by XXX approximately cost quarter we inventory adjusted quarter. selling and will that impact $XX cost higher the negatively The points was third higher basis driven of third in higher by inventory will year-over-year

in expensive year, the be cost For more third will inventory the quarter product the by offset fourth quarter. full lower

loan the quarter sequentially year. will in loss prior and the Second, expect be we to third the similar provision again down

at key end cash guidance For the prior the $XXX for in full to guidance we to range X% year, of drivers range. expect $XX With $XXX million and adjusted our lower higher million we to to flow, expect VPG of range. X% be tours respect increasing million, to our our X% X% are to than now increase the free we to the

members down will the exchange to number X%. For believe will X% member be rentals and flat to per continue and be up we average business, flat revenue of to

our second are we conclude, the very pleased in quarter. with To performance

stellar growth EPS I and extremely Mike on point of job continued and cash improved fundamental who executing at flow. and the to continued outlook mid strong leaders have free Our a of our XX% operating year full a for our do strategy. associates proud are

With up open call we the questions Keith like for to and to that, turn back it would

Operator

first from [Operator our Please with Instructions] take question Jefferies. you. Thank ahead. David go We’ll Katz

is line Your open.

David Katz

everyone. Hi. Good morning,

Michael Brown

morning, Good David.

David Katz

equity, do the which to a preview you thinks agree one business securitization trading questions relative about us of getting, other in the the the or I see and has wanted are terms to the flattish? ask, one it obviously hangs is Because on is how most the multiple. that that we the where it to values continues and difference, your sees of feedback business that the what the and investor see would I the how we right? thinks stable reconcile a base low-ish on improve that is business at we From and been think

Michael Brown

great further a question, to we away from we more recently separation. a little get more it’s David, and seem hear one as the

and just came the first have year new markets track as in management a is, we completed our as team we We reality are the without out, Destinations. Wyndham a record public

appreciated. that think shareholders. was cash and And approach think I growth mid-digit unchanging there flow, recognized goes I quarter single public, cash came consistent to generating a getting we returning free is that every being by As and we’re

to markets the between us, as strategy continue we which we shareholders. continue where think to debt the the deliver think we’ll and again I where quarter it, equity markets do second really believe our returning proves see I and to core capital close So the delta

David Katz

not how bunch obviously and to guess then of who with big we And thereof, and you of deal? us parties Vacasa, business? interested it. but we’d essence there, is my this about that’s enthusiasm right. came are a competitive follow-ups from was that’s hear love my And and the hear about your that whole in a sort I it? I’m them. that in question was familiar How of follow-up where All can they pronouncing with What hope as about correctly, I’m tell they respect I to population

Michael Brown

There is a lot there.

it because North business. one, exchange we Wyndham But me number and believed saw robust having Destinations business private two, of interest lot both equity. inside Destinations. we America very from a North leverage a strategic strategics number by end, of could Let start, with American rentals was the And and with process rentals vacation the some the in ownership opportunities in Wyndham came that

model for only the we in team, last in we adds felt could got in We and to of stake. right type believe through it the retain exchange. really on been scale space buyer ownership their this a revenue because They’ve this the equation. company. an lot leader ownership strength as make Vacasa they As to job of a are for believe takes went building review, of decade consider have and that leader this and vacation strategic got now a done with of position we vacation business to reasons decade for rental wanted over Vacasa model It’s and the the the themselves do of the putting has what we phenomenal major driven industry the over I’ve their are relationship great business the have their continue job transaction. we and a space great generation. great and and is a technology that I growing side strategic Vacasa a a to strategic future, been as know that to right direction one They is we management equity the expertise and demand as the and in their

David Katz

Got it. you very Thank much.

Michael Brown

Thank you.

Operator

our And Chris we’ll ahead. with Bank. next question Woronka Please take Deutsche from go

Chris Woronka

Hey, good morning guys.

Michael Brown

Good morning.

Mike Hug

morning. good Chris,

Chris Woronka

mix owner – profitability Hey, how going – and international, factors bit to tell guests? for kind little know Can good to of us maybe impact the remix international one business. your the you things the is Question this guests and mentioned the of that of going a you of new domestic side the about that morning. I versus you’re year

Michael Brown

lap that the North made of arena. limiting marketing a new do we Michael. the quarter. no different take more fourth marketing international October point. remember marketing around in we and In our in the that call of I on this fourth were at that We profitable that. profitability, That’s in off I the decision the quarter our found year, our looked We tour why creating decision of This focusing last and made not we marketing channels operations said on year questions fourth at flow is number we last than that in fourth in America. Sure. I’ll will the channels And quarter. channels had were owner decision and better quarter

in much more VOI into Thailand. operations they recently America. international XX% South margins pretty can between is in And same, Chris. really far of and we’ve I As and Australia as between internationally ventured are we the XX% domestic, New up sales do And and Pacific and North if about that Zealand the operation, XX% the our scale our

in is mix primarily So of our about international in it’s countries. XX% and those

Chris Woronka

at, helpful. follow-up about, now exchange be maybe would the Rentals of you but how two rates you Vacation are on my profile little going exchange maybe a on think How growth that bit we you Thanks. the – growth side? business, kind can the from profile maybe then know the you Very and And us improve along have that the don’t EBITDA the businesses, and can with how Okay. reenergizes the exact at that maybe – tell maybe the combined that. exiting the growth I of look business

Michael Brown

mutually. an Vacasa, want warrants Vacation to that ago second And exiting are there’s exchange staying to of is, just us we But opportunities very Absolutely. Vacasa together although I to that one. have come we and number strategic and can what business lot grow engaged it business think business, do we to gave David with that of our both each a in both Clubs number back two relationship we is, other’s help to in answer equity business, the a comes stake I are back retaining believe in the I

that. I So wanted just that’s to – clarify

stay and really to it on us business margin. remaining business? does not the our vacation core with It do business. exchange Secondly brought is, it The rental lower allows ownership and focused for was what

remainder an strategic flow; us keep back ability a) allows about growing to: margins cash promise c) So secure business; then made into that us that the we in a This make to for our our if really transaction sure we're direction and on will not right laid generate the in business. very exchange it’s the they of And new RCI reinvestment b) the and long relationship; side. retaining that headed lastly, focus the this feel feel haul. core projections I'm for business, year with progress the help our the we've that with out pleased seeing the on the are re-energize should initiatives. play out

Chris Woronka

Very good. Okay. Mike. Thanks

Michael Brown

Chris, it. I appreciate

Operator

next question Our go is Patrick for from SunTrust ahead Scholes Please Bank.

Patrick Scholes

good Mike and Hi, morning Mike.

Michael Brown

Thanks Patrick.

Patrick Scholes

wondering from for I advertisements? costs of the think, I recall that you. third to radio don't have drive feedback the folks. the a that would question you in I And that then only I to advertising other what sort hearing that. is there company third-party you've that, actually sales it gotten on intention ESPN you, from including is about? counter companies. or advertisement Radio, timeshare higher of assume Thank I'm it on you A marketing something heard, hear obviously, some Thanks. these What's be day it a was party the we that is ever talked

Michael Brown

last answer short question the the part it's of not your is spend. on incremental no, Patrick,

the but churn as base we've made place not satisfaction very industry. our rates, only The commitment about owner in more is having talked extremely reality around industry, have narrative stronger, as We the our many The talked of that is about, a is ownership low. times, in a high. the positive, we've is

And of the of sharing and ownership than in for enjoying XXX,XXX maintenance XXX,XXX me fully our ownership. heard proactive their paid with mention making the off of owners proud You’ve we've been news people and their price a good less fee. are vacations great before

and very general But individuals. nature was positivity vocal virtues with of or a a Richard overdue was Petty and real a presentation certain in been advertisement, hear but owner vacation He's with awareness, an sales expressing think it simply about has general the talking our the this other positive a us you that we’re a long marketing, more can a strong with lot a marketplace product been appeal for a ownership. benefits the along it's type of the time, timeshare positive people. has of many I really messaging. of And long of not some strong so endorser that not only in

Patrick Scholes

you. Thank Okay.

Michael Brown

Thanks Patrick.

Operator

Greff Please go Our JP next is ahead. with from question Joe Morgan.

Joe Greff

Good morning guys.

expense. coming flow the is guidance how it's increased full looks other Can allocate some On interest free sources? cash year it like for adjusted of XXXX, from from you lower much

Mike Hug

free when on expense that and to both benefit we Yes, look very of flow advantage we're the the the in I adjusted business. with improvement working think received opportunities obviously taken capital of our we cash happy as some we’ve interest at relates securitization, side the the

of was it us raising those in midpoint the the of combination three million. a things I cash the guidance that $XX gave confidence by think really flow

Joe Greff

last clarify, relates I'm morning? here, Got believe as the million quarter, here of of it. something you're EBITDA $XX in well? What is said much pocket since of EBITDA. out you year, And this How reaffirmed of for to last neighborhood selling it of that terms just was your I year. revenues in to maybe the guidance EBITDA what

Mike Hug

financial transaction driven in from is to Yes, sale when the I be will obviously by we think, the received. what the closes year part is do the proceed impact plan resulting full and

to America closing impact financial rental North expect that – business. with we So of out the would the year after transaction the it sale as on to more the relates the details come from

Joe Greff

of up balance million, your remaining Okay, Vacasa that providing my cash either sources to cash great. be equity or $XXX determinant $XX close going the financing the either transaction at of What's equity then balance? it, the finds of the $XX million other question, million $XX closing the or And the million the to is $XX then for price, you're sales of balance that final or million and to financing. of for

Michael Brown

This is Michael.

been done going is number previous successful of soon for Let to raises. one. take going me has very that and with market be and a Vacasa fundraise just a to

sector already we into simply the following those with on significant market of good in feel market the laid provide over structure get put the to months. some market And been with there's depending this space, raised leader place opportunity The several out their amount closing the the capital conditions. fundraise. in Vacasabeing last successful to was flexibility a For that's about for

Joe Greff

then great. final question. one And Okay,

back to EBITDA going since the rather that’s Just for from net-net adjusted you rentals? reaffirmed, Or in year there is of being full guidance the impact actually the everything a from not some close with sale in the vacation it did raise coming out for fall?

Michael Brown

guidance will for Yes year. we’ve flow the assumes at all entire provided of the with remains transaction us point to it the the the sometimes will the business cash fall the year. America that as EBITDA relates today North that we for guidance rental and update and close Obviously in

Joe Greff

Great. Thanks guys.

Michael Brown

Sure.

Operator

is question go Please next Our Zaffino Oppenheimer. ahead. from with Ian

Ian Zaffino

you're great, on a decision? you Hi, just from of low What's you. Is I cautious kind the you're said the Is guess what the be on touch just or you seeing color Can and to something that thanks. Also that guys out there? volumes, tour that the us end. give you going there, consumer? driving are consumer Thank try seeing ground a little that? for

Michael Brown

consistent strong. major we're remains appreciate the into consumer quarter Ian, Brown. is This evidence consumer obviously no the very second on a We're much that Really closing see basis macro on reports that seeing it. traffic very I strong. markets remain and a change there's standpoint, Mike

what saw wanted to finite a in the detail of second were Specifically very it's quarter. we little out bit issues. call why Those we

our of it's a of international half a a Nashville, year. mix. As But ramp in in I of behind reliance of delay over this first had had natures Nashville. partners sales diversified site, headwind the specific the little of one very on slight bit one mentioned, ramp. their location we tour tour their we remained opening first of in downtown have And They're flow with the we them platform. our a simply marketing marketing to lot that We on

to showed And softness, bit in working our really their little Thread, than our them of ramp but flows. obviously what the strength A help partner, the the that. we're owner helped strength Blue more with to arrivals our tour of mitigate

into year-on-year. only been account but you second the year, up our what this of quarter all percentage causing, tour that's And one macro American the that's taken nothing again flow for because it So was half was saw. second North point in X% of

Ian Zaffino

And then about of you leads and change I of also mentioned. that is there's you're channels you guess Can from one expect the a where thanks. relationship? on And there. the getting maybe what know a talk guys Caesars should we I touch Okay, always ownership lot you

Michael Brown

relationship very mutually versa. And have vice We a create and long and is beneficial with value Caesars. the reason them for we because

expect in that new we're We it relationship have that had hopeful any not conversations, and even we I would can grow change with a ownership.

Ian Zaffino

Okay, thank you very much.

Michael Brown

Thank you, Ian.

Operator

with Grambling next go ahead. Goldman is Stephen Please from question Our Sachs.

Stephen Grambling

Hey, thanks.

market the proceeds of you that sales from the the different stock than seller about is, or opportunities vacation, expectations? rental from remarks core assets business? the on how you opening the in cash of on the mentioned your think where for your similar Is use do dearth generated think So by or driven acquisitions. I

Mike Hug

demonstrated year question. that repurchases. M&A to did relates the of returned through the little morning, the this the good take share of use or think, activity. Thanks shareholders we then Mike as as use there, When that's we've the Hug. it to I'll we'll talk the this part is Mike Stephen, a for will about So receive the M&A first cash increasing absent best cash is opportunities any that dividend we I already think our about received, the out cash and

that be cash expect received will M&A North from once the done that last opportunities, of used excess rental American what I business X we've of So sale with would June consistent absent are since again, year. any in the ways

Michael Brown

much But use And always a touch than of better are be generation better to our I'll from right very And cycle M&A consistency continue the there better we to support economic M&A think will We resiliency of exchange to business. the clubs the during there cash our we No cycle. in it's share a side. get ultimate if the that we the the are or the repurchases. M&A opportunity side What I seem watching continue on for looking in free midsize of where just would is any flow downturn. to better and will very previous goes. going we different evaluate either economic depending when stances or and the on Opportunities there's a say is and conscious downturn. believe if tuck in the is vacation growth be would opportunities

Stephen Grambling

a changing loss gears provision basis comes the as as provision, interpret quickly guess dictate I a receivables? write-offs bit follow-up, big how that I guess what up and will percentage on factors absolute and of down an the to And financing we how ticking that should are loan the a

Mike Hug

So our it would one, things expect there, the the to has write-offs relates write-offs, a two would couple portfolio as grow. that grown, you that of things: so

the that In of is a seeing addition, write-offs last over had been year I were we're the we first or are in write-offs the quarter the And also that out the write-offs second would the higher not why which two year so actually higher we've us. the point a of lower because than in write-offs, the increase to trends in higher surprise expected providing quarter. in the the year-over-year at increase rate

that really the portfolio benefits So, we we things. and benefiting of making those are the are changes several drivers that the feel are

down in we a that and that in standards payments being tightening and at place as all, up. previous the – underwriting higher of First good have we call, those talked taking look about

year first institute second get we benefit only in we quarter the partial and which means those the second changes So didn't in a quarter. in any benefit the quarter, the of

year the second the sequential the half drivers will take continue to second the the improvement as year. provision in So hold the those those to of really key changes be half through our of in

Stephen Grambling

Got it.

And to so the provision the lead just then write-off clear, be should trajectory?

Mike Hug

would the that's mean which curves the think, rate. up, look that that's on were expect trends I defaults. in the I as would second we see average provided seven is life of right. higher at But a down that expect provision a losses so right I this And lower future would provision we once seven-year down would indicate as Yes, half on we in defaults then we year basis. is again once time, over of loss comes our in keep going year-over-year the mind a comes lower have again wouldn't when portfolio the why years portfolio. the

Stephen Grambling

in you. jump Thank back I'll queue.

Operator

Our next Research. with question is from Wolfe go Jared Shojaian ahead. Please

Jared Shojaian

Hey, good for taking question. morning my everyone. Thanks

with of of from on you against and party needle recent party do bankruptcies. tangible enough line seen of evidence been of to the same facing? you've you've Is any pushback the questioning we've maybe think your some that rulings issues some move write-offs? some sticking seen perhaps third evidence tangible reduction firms the more just here, And recently of that with the third some court So that

Michael Brown

lastly, continuing part Internet, a of the of engagement regarding we're litigation rivals talk and support increase is media When reservations of regulation. owner immediately our the legislation key the we're in we with utilization, sharp the core underwriting, digital prepared as the not as mentioned, purchase. piece, seeing evidence Jared, mentioned our about the greater presence loss me loan always our tangible litigation engagement. To provision, is talk consumer that and seeing of form the we about owner and overall refine remarks, strategy. you and social then but not in owner advocacy owner and We effort to our the portfolio only on our starts after it engagement,

rates up. contact are significantly Our

around the few years, heard and last And our you've Cares me the program. over Wyndham Ovation discuss discussion

either yes our But of is the is or the disinformation misinformation is right the to litigate. core that consumer metrics. consumer, strategy. about thing about and the when So, see It we or improvements will engagement done around us, being us, company do tangible harm owner really or not engagement in being our evidence seeing we litigation we're to piece the

Jared Shojaian

year. switching Got end the gears you. the coming full Mike, of And said tour towards the it, thank range you in here, likely is then for the just lower

move unchanged. EBITDA you there, Were not enough offsets the is it call that there really or kept the out other You guidance to needle? would just

Mike Hug

the achieving enough move year focused not our it's And No, obviously really numbers. to needle. full we're on

we to miss we we do talked that can a it as number we have the do sure things hit to for need the if we've as make So do tours, about year. definitely to that slight relates EBITDA the

the right that any on we cover overall end organization we basis So end finding looking lower shortfalls up an have at might are making the and places of the it's just if we tour sure to that at range. the

Jared Shojaian

just the assumption that points can for the quarter to And steps said is is reiterating be quarter the a new to I full the be year-over-year. Is would at I year on Great, a of line may. be the going fourth quarter on XX% full year think or down? provision, Is And quick little bit. you basis going the last the year, range you're if rate if two in so owner but of Do needle it's about the you then still items think, XXth with off the that sales third kind fourth mix? I provision similar it you. your similar housekeeping also thank move you're know year-over-year? expectation by

how specifically curious fourth thinking provision? the quarter So the about you're on

Michael Brown

is this then the question. question take second that I'll Michael. first and Mike to over Yes for the hand

owner for don't we'll the think new the I at XX% On be no, year. mix,

the in somewhere upper right be XX%. XX%, we'll around think I

call also those side has and reality out Just behind on end dilutes on by owner XX%. therefore, five-year sales up, to move XXXX, context percent were being new our sales our new natural the The is wanted with owner also increased significant and at to and new owner mix going in mix very arrivals in quarter, was made second as the where to year. this diluted on owner front, of tours we're We've that. we up that positive pleased very changes owner a a are average

reset those get to really owners the Mike? on be new to sales us owner mid-XXs XX in trajectory where is in with out last increase the we're the wanted which we mix So basis expectations points change in about expecting months, XXX to a sales we new right very and as mix. comfortable the called for we ultimately want

Mike Hug

of what the trend in will in quarter really the more comparable provision those the last what allows year decline to quarter, we year. see numbers this us consistent on the to saw we significant fourth will are And And year. you third third of right a XX.X% quarter be for reaffirm confidence is in Yes. XXXX, with the full

Jared Shojaian

Got it.

saying So down third the what you the you're fourth from quarter? obviously more but seeing year-over-year third the steps fourth than like down quarter, quarter in quarter are

Mike Hug

Yes.

Jared Shojaian

you much. so Okay, Thank great.

Mike Hug

Sure.

Michael Brown

Jared. you, Thank

Operator

Instinet. next Please to ahead. go with Dobson Nomura Brian go We'll

Brian Dobson

morning. good Hey,

mentioned the that what you XX% Thread see roughly the were Blue will do next you How that Blue quarter. balance do generate how year? So of that project up And year? tours tours of that, through in the you think do rather you or Thread percentage trajectory

Michael Brown

projections, of rental what So, as year, a and year The really you portion laid is the for is remainder and way convert about look good a the the we marketing, about rentals have we strong ultimately mix quarter. to full Thread through that. come second the we've very that in on Wyndham Thread we have have confident we out the website for called at talked tours. in-hotel have of combination talked line tours sight The hotel that of and our straightforward we Blue works and we resorts Blue project the then feel our transfer to we

after The encouraging a to and that in up call future come of call our Blue call. XX%. remarks up when for packages arrivals that the six therefore much, volume which is volume that's included in quarter for was future precursor had QX months prepared tour. number not we Those Thread XX And the typically in was second our

really anticipate as as going saw percent fact year. a I forward such range At for to move stage, wait new remainder precise Blue in this Thread the mix, to increasing increase an that in the till actually later owner for quarter the Thread us is second this we fine-tune do year we our and volume this Blue we’re So around of call that of a the encouraging although put for number.

Brian Dobson

the then in Alright, a improving consumer other Could terms perception the bit of referenced marketing product? consumer in the you're call. earlier about channels advertising understandable. radio talk and of you using outreach little And you

Michael Brown

the majority of and Absolutely, forward, two new brands, put the greater is a I really launch changes start out implemented the enjoyment perception owning And we we’ve us where vast Wyndham on our the team and Vacation the have Internet, of our going digital really the Wyndham and laying within around Clubs energy value timeshare. presence. with that's now of one would that efforts that's Destinations, we've more the world-class for that message. the of money It's results in a hear all to be avenue. the to The and we more is one existing about I one more we owner radio actual see want budgets positive of their the one avenue the to in to it now. it present anticipate one, and our being, But today. not And in by medium simply hear that base. just that until people is messaging don't would messaging wanted positive ownership. it out positive majority you We there just

Brian Dobson

Thank you.

Michael Brown

your which is mentioned quarter think, second it other is putting the important money first that, which thing thing the but or question quarter, I system. where Brian, I what in not directly very does, is answering one CRM And our is other around we're

We putting but and America. standpoint. approve in a this a to only the out amount in efficiency of quarter from be are the that North end We locations we're to the where that of significant our experience CRM rolled investment we done. of our house, sales the not on we are marketing fully track quarter really partnering of would first customer in And be And communicated back for by on Salesforce. later system all that sales with year be will

Brian Dobson

Excellent thanks so much.

Michael Brown

you Thank Brian.

Operator

Next ahead. we Goldman have Please Sachs. a go from Grambling follow-up with Stephen

Stephen Grambling

out? get Since just back a as and on. business sneaking Thanks. continue we the Can that free cycles. question you me cash could that big us even what swings deteriorates. last just opportunity flow now cycle remind Hey, on stream better should of drags for smooth free One and resilience thanks should how you mentioned, the better flow in drove is get of as and model across changed cycle to has the the in acquisition cash or some the

Mike Hug

things, is Hug. and one the XXXX to cash swings This inventory. for drivers thanks Really Mike way two the of Steve. Yes, we free the the were big question procured flow XXXX prior

where sales working with that as per you consistent development take lot model which inventory putting of down development, to you in which we million were years about some we we're obviously just As plan, support XXX-unit to if or model in money doing did of a the tower. allows guys on switched into partners, know, means XXX-unit time especially needed of $XXX a were very inventory We've a we self a we inventory, year. large for spending

resulted purchase. marketing driver we in level the higher at beginning is we January the to were very quite be, the to in why big The XXXX we have it down came sub-XXX financing ABS FICCOs wasn't which other did markets sub-XXX would a pre-XXXX liked bit to eliminated that to on of they the of always And of was, FICCOs attractiveness when the reliant that payments. it

since at spin ABS really So as to transactions XXXX demonstrated as the go and that last to we've months that the rate we've been XX our consistent the able BB over XX%. and since more Tranches down sales especially increase table, where to well as advance cash

the we sure making place. model, terms So consistent of then standards have who to inventory quality in spending underwriting in market we we and to and the maintain just-in-time that

Stephen Grambling

so Fair enough. much Thanks

Operator

turn our remarks. on Michael And period. this conclude I'd question-and-answer their Brown closing the to like will call back for

Michael Brown

let by reiterating we me the you. are in quarter. Thank And team's second pleased close execution how our with

the members to dedication with and vacations. to committed public would are like provide first I year for great who personally our of hard progress as to all their our guests without associates thank enthusiasm Our nearly work possible a during not thus mission far our them company. owners, XX,XXX be our and

the we year to as are the continue world on vacation. of We put excited for rest the

forward joining for next and you Thank we time. us updating look you to

Operator

conclude today's Thanks And for will this program. your participation.

may disconnect. You now

Travel + Leisure (TNL) 30 Jul 192019 Q2 Earnings call transcript