WYND - Earnings call transcript Q3 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to Wyndham Destinations' Third Quarter 2019 Earnings Conference Call. After the speaker's remarks, there will be a question-and-answer period. [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.

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

Chris Agnew

morning welcome. Catherine. and Thanks, Good

Before we'd our Actual differ obligation SEC The factors undertake this and that forward-looking are morning materially cause we are effective our those update discussed to statements, will that begin, from of statements a include revise publicly like to in in today's find non-GAAP these and statements. can to only earnings call or the forward-looking the made and Web our in as investor.wyndhamdestinations.com. financial no filings, site on statements. indicated discussed actual you results forward-looking could differ you of our results reconciliation could release the at remind press today measures discussions We today.

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

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

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

Michael Brown

EBITDA We adjusted earnings of $X.XX cash share reported per versus free of another to $XXX shareholders. and the you, We're to commitment and adjusted year-to-date $XXX to Good today. for third strength happy our demonstrating quarter, reported morning, Thank joining cash million. Chris. This $X.XX $X.XX quarter quarter us you cash thank flow flow million, generation, the everyone, morning was adjusted of strong guidance. third we our model, report business and to of returning

increasing adjusted are we for guidance full-year, and flow. adjusted free cash the EPS For

Gross of in X% increase our updating guidance after VOI increased the third in prior for narrowing quarter a the Hurricane impact are tours. on over X% EBITDA sales year adjusted the We Dorian.

XX.X% sequential year-over-year VOI in to of We our loan provision also had improvement gross loss and sales.

groups. Rentals Wyndham to earnings $XXX ARN, technology On travel million. across by enables integrated and for of RCI Vacasa value-added new These week, acquired transactions. to channels the August of vertically to we its enterprise. million. value we user on RCI build for and provide business, of growth. business closed our or Vacation travel by doors strategic strategically diversification the resources RCI closed optimizing to is This Last Since the Network, growth transactions travel other to the acquisition two core our enable benefits and two commitment to allocation enhancing Xth, a services core demonstrate $XXX will ARN and opening call, business last business-to-business of sold Reservations our us proposition integrated Alliance that platform a of

is improve experience improving gain to is well One by platform program Cash offering booking underway, very RCI currency and in have of the expand between we the RCI greater trend. and combination member integration unlock to continue programs revenue implemented focus we RCI allowing program which ARN. cash. is acquisition initiatives other program Cash plus momentum experience. that can and RCI members on and customer the customer more and is our such alternatives Deposits of to development for RCI's accommodations ARN the We're about core a of ARN businesses. a to our already and improve continue the travel where new simplifying to our opportunities efficiencies Deposits has membership The excited The plus flexibility business, with provides process technology to per to its strategy. our through the members. exchange enable business help purchase our

over is with strategic million important an Caesars we outstanding announced our September, partnership, XXXX. that discuss extended XX,XXX that gears switch Caesars a for offices. our to to a XX-year owner Las relationship generated our XXX now value significant to XX significant the Vegas Caesars alone nearly has open to years we approximately pipeline tours In delivered secures of market relationship has This sales. our me platform key partnership and new renewal been This growth. our sales in marketing going is new which us Entertainment supports owner last a Let year forward. through partner,

success than over owners year. amplified to mix. the millennial due sales. have our our and objectives. X% new and to progress prior We remain continue Our in Year-to-date, weekend Day important confident saw owner new strong sales new Wyndham Gen in transactions consistent sales X owner to growth Dorian. Vacation XX,XXX, Clubs enough to dilution our to increased natural arrivals higher and had Hurricane in Blue a owner sales owner growth growth dividends. and was which owner arrivals Thread We and customer This and This Labor initiatives new achieve was segments, pay does continued the the are initiative, with arrivals owner engagement generating long-term owner in

So far with is in owner XX% and who and partnership new the sales quarter millennials, engaged growth year-over-year This to and continues XX% last, year-to-date. the Wyndham Thread added in higher sales to owners XX% strategic XX,XXX overall customers this owner new VPGs program of new X% strong, Blue XX% and continue to third tours over be the are owner we VPGs. in quarter. Rewards year-to-date. and which And more new by XX% deliver drive increasing XX% the year, X quarter increased Gen

Our will occur to marketing long-term and strategy sales new continue growth owner ramp. centers of as new locations

in now shareholders October commitment to cap Since share demonstrated we spin the returned of XXXX, to in we repurchases $XXX through and dividends cash June the once returning year-to-date have to our months. of Switching XXth. our in with market shareholders XX million capital XX% again allocation, to

have twice totaling cash our excess flow our increased XXXX, of This free out to identifying $XX share use business. we of our dividend, remains encompasses and committed cash while repurchases. guidance free free cash compelling million. consistently generate commitment laid to believe Since quarterly flow the the to efficiencies free We our initial in in expresses which we flow, in in our generate we cash flow, are confidence ability best absence transactions,

I reinforce recent conclude, to would performance. To from takeaways our three like major

closed and Destinations. on transactions were strategic we RCI two for Wyndham First, milestones that important

Thread free adjusted in Second, and the sales XX% full-year, quarter, up Blue and guidance. we EPS, and adjusted income, cash outlook are the increased for our adjusted our XX% regarding are year-to-date, increasing flow lastly net

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

Mike Hug

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

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

prior adjusted Our EBITDA year. increase EBITDA diluted million $X.XX, and X% adjusted over Adjusted of an third was quarter the was quarter. margin XX.X% in $XXX EPS the was third

a and been Third increased tours growth to Tough in comps $XXX quarter quarter. VPG, with to closer X% VPG million, X% year-over-year gross year estimate tours of the increase prior year-over-year in X% year-over-year third the would excluding we comparison decline in the impact a in X%. have sales realized impacted Hurricane Dorian, the

and by cost. Vacation million over higher with for Ownership $XXX sales marketing EBITDA the offset growth and at year increased the X% of cost revenue flat prior of inventory was segment Adjusted

the second we by to continue lower expected quarter. in be earnings inventory to call, and our As offset communicated, quarter, we cost expect cost product fourth in the third this higher quarter the

revenue increase in driven average the member. offset business, of members, exchange per the our was by slightly ARN, decline in number by In X%, and revenue increased a inclusion of which X% X%

The $XX tracking rate compared member expected, strong over positively to prior was the segment the adjusted exchange currency increased cost excluding and is has flat revenue year-over-year. per to control year As EBITDA historical from trends, million. benefited to X% close

confident third per we and of sales, us to provision gross a improved again XX.X% in taking quarter percentage to are as this the Turning second loan in VOI XX.X% the achieve quarter, full-year XX.X% from improvement actions our quarter of year, to allowing provision year. sequential loss further We provision last in the remain the to we the the to provision, the guidance. and fourth anticipate in XXXX continue reduce

million adjusted from net due to operations, activity. free continuing for income The securitization nine increase was XXXX. flow compared cash of million, Our of the higher period to first net higher was in months XXXX and $XXX the $XXX same

flow We with in this cash the our are free year for securitizations. execution confident of three

$XXX terms, to record of third last a week average The a X.XX%, and million was confirm ABS with markets. proven access pleased XX%. transaction of with our we rate advance We were able of that track which again being coupon weighted completed an the very these

In total of repurchases of around September declared million By as debt $X.X our million X We $XX our had we And share within target shares. anticipate price $XX our repurchases with the Michael September we with average with of million the and billion of at mentioned, to receivables. shareholders month at was $X per October, $XX.XX a third to back allocation dividend year, per cash XX, times. the the sheet, non-recourse August net XX, debt balance cash With consistent as of securitized quarter. share, We Turning cents on our of of related XX. bought continue times equivalents on billion, which X.X $X.XX quarter. at end excludes we of remains corporate third of in leverage in leverage million. cash paid of net X.X our will be with leverage, stock a to continued which share weighted capital we the $XXX

are for be turn million the to to Dorian, billion. we impact the EBITDA remainder $X Adjusting narrowing of the range Now, year. the outlook our just of Hurricane let $XXX for guidance our to in me of

to tax increasing well $X.XX diluted from as primarily EPS share $X.XX lower of $X.XX our on for account. interest lower $X.XX, outlook to are and range adjusted We as to expense, a

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

costs quarter mix EPS from fourth adjusted quarter This a expected from new fourth the will to fourth the flow, as the lower lower range a to benefit of which The stronger be is provision. well $X.XX strong inventory expect $X.XX. will impact from mostly VPG, in XXXX, to dilutive arm lower flow to by we as offset For quarter.

cash to is million $XX the higher adjusted flow, which are $XXX range. million increasing $XXX guidance than million, guidance prior For to free we our

in be expect to for the up the respect With X%. to our range key flat to now of we full-year, VPG drivers,

We continue spite X%, lower to tours X,XXX of of the X% of expect Dorian. loss Hurricane end approximately to from the at range of tours a to in be

flow. and pleased are quarter, of third for the our with average To members our member we believe conclude, X%. X% growth For strong be outlook will business, will down continue to up per to revenue the very be in exchange flat EPS free improved we flat to performance cash number full-year XX% of

call the open it turn to questions. like for back to we'd Catherine that, With and up

Operator

Instructions] Please And comes first David our today with from Katz question [Operator Jefferies. ahead. go

David Katz

Hi. Good everyone. morning,

Michael Brown

Good morning, David.

David Katz

ways let question I wanted think that. think other ask Look, cash kind and a perhaps discussion out bit or I about had progress Have to take in is bigger it, what you active or kind you it, you, thought capture that a I that quarter. where all that are value or a highlight would agree taking and picture couple you the want. valuation past, what I because it about around impressive a it's of of the and a have necessarily doesn't more of see things whether good sort the to times probably up the of that this and of leverage sort you proactive that's do of could we we have to comes generation operational just stock

Michael Brown

you our would around the forum the there's I those seem company to it's there's elements. we've trying We're a sector, and questions step at our think what is, our the into I reality back to time think when the lodging, as I can and that same do important cash deliver moved loss justifying our late companies don't I and flow, lot be view strategy moment the within operating limited the company, it's not think really is the don't everyone a to at let's metrics, will don't quarters you've leisure corporation. value probably gaming, even our valuations you and consistently our you limited deliver out. cycle look loan around generate a consistently And play six David, with the sector don't we public think but Destinations question is were right at your provision, say questions but as on for impact important public can Wyndham is, laid at itself rightly where started to all here, you because this not as very it's what many started the question,

the out twofold. maximum the Number of to months not at back We're my not and last valuation. We trusting North ARN evolving We're think it look one to sidelines shareholders the to for in the four our route the business in is, sale we've value We're on American recognize long-term the opinion, Street modifying there best business the getting to rentals. and best that. the exactly just our be position waiting done transactions, these our what two will is deliver. do growth, our core for in between and

continue will modify to and We evolve.

when do growth, status to cash EBITDA commitment a we form there dividends with our not in we and public will our lot the look meantime, core consistent you what said two continue of consistently will So, is repurchases, the strategy deliver are to do quo, and I operating all to demonstrate transactions and as our which continue we about cash out take, to flow, back margins your we will recent company and being continue the of industry-leading. we question of flow to simply very opportunities actions most deliver satisfied which to out a would in is came shareholders at free think and what

Mike Hug

add would thing And that. one I to

David Katz

Okay.

Mike Hug

leverage On to way the the mean, increase to capital the return leverage shareholders. I for piece, us isn't only

able million to were how over transactions, share whether that think a the ABS generate through cash, sorry, at been and sale to if about started increase repurchases million in looked cash. I'm we've I ways of generated the on year, you $XXX the which consistently -- in sale quarter we of execution it's $XX our finding American North the great business ARN, the rental which we

with out has sure the out So to even cash to things up, of to repurchases cash, which utilizing of doing level right have business every once quarter. drive us focused continue this on, to again we every we are very generate making we're levering asset the increase allowed share

Michael Brown

And heard David, a I think David, I well? as follow-up,

David Katz

Mike kinds about of I no buy just, bit leverage could back leverage think of aren't certainly top on stock ask would a I make kind there doesn't we where under and Yes, the where really circumstances sense you mean, end Hug, be, little more to of a -- to how take it more certainly bit these circumstances.

Mike Hug

[X.XX] think said I again, we're Once repurchase. smart we've to over right that don't this share Well, repurchases. our take to at I is, wouldn't three things [ph] times point and mean is three would all X.X get that times, said we're the for at be additional to of what to the range I we've times, drive repurchases, share doing expect but level over the know to in cash to better it leverage cycle, share increase us the

additional accomplish once that think business. share things the can repurchases in we do we again I by

David Katz

thank it, much. very Got you

Mike Hug

David. you, Thank

Operator

with Woronka Bank. from comes Please today question Chris next Deutsche ahead. Our go

Chris Woronka

guys. morning, good Hey,

Michael Brown

morning, Good Chris.

Mike Hug

morning. Good

Chris Woronka

mix, an your problem think Wanted the was third in morning. good a have of a to long-term have current had obviously example from owner kind of strong you kind the you owner ask increase response the quarter still probably that to new targets I on mind mix. owners, in the of Good very but to

and does and much our is owners going of how pivot marketing on get question really to thinking those that the in, new So impact of can you kind consciously forward? kind sales

Michael Brown

we a business. owners stream -- the one forward. we Chris, very know that they of and our future predictable revenue go the about been pillars key that will and again, strategy, importance is for remain provide the pillar a it's new of of key has as What

have. absolute I is get the new drive to but of a to phrased you to quarter owners very absolutely which continuing important, is to third So good specifically, it's numbers it, think, correctly, problem

We year have months first to increased of incremental initiatives owner owner engagement, have to our this owner nine been of members. out lead really the there base XX,XXX an and XXX,XXX engagement through arrivals on committed

people creating is our our sales the in is owner sales driving our in either strategy, a That on doesn't percent that putting new change It and in long-term. sales. more incremental dilution or short-term vacation, total opportunities lot team the as we're our a sales, on percentage, the for naturally of those owner So, more sales mix.

when drive the second-half out sales, owner year. and about continue pedal, new were a to new we fourth the in that a strong to on have to first-half accelerated growth We We're going our think excited will of put tour to fact the owner we foot much what this really be, of year very prove quarter. the second-half little we're so new this soft tours in owner we've the to driving is going are and

Thread mind ended but committed we Keep softer we're where would the So, up, initiatives the XX%, think be. to for as over-exceeded over owner and singular, growing we year, points of getting weren't XXX The points were element it. tours new basis core reasons, new first-half Blue then to to about sales. year said in we're they total we macro-related, that the year owner and in sales is basis XX%, we're there, I year of XX% about our last percent of We're a the incremental it that we driving right the ultimately also in XXX had issues this committed softer.

Chris Woronka

then Okay, up a vis-à-vis you're impacts kind and I of front, second, what margin think very to you a maybe do just or exchange strategically little be growth kind you getting could you've with exactly is margins commentary gave up of on do, because there's you still vacation on the whether are on that great acquisition, revenue that but unit but what the do helpful. kind still don't know EBITDA done do there looking I guess, also of and whether job of acquisitions. rentals, can longer-term ARN And that you the with more platform out a see more there, think I complete

Michael Brown

this I'm excited acquisition free call. about It's not Chris, that investment. on always quietly the the the if years is so anymore, earnings guess in RCI capital little say this generates I from we've as with that two with talked am, but area great excited I because a quarterly my exchange company about cash flow I really quite an I'm business leader for

exchange, it cash. timeshare is platform us is it that be make broad mentioned, is and business? core core because strategy opportunities, of in think business, financially had into I little it today. of have we then transaction nature an to the plus All who two things; to start the booked material more a Cash us space. Well, enough loyalty have also of tourism book allows opportunity room today? this that provides of our reality, that in more of exchange still but case it and this can't the And is why you've provides make all offers What in I acquisition our programs true make Absolutely possibilities it that and last be us night how just not, example and a travel not used a the ARN us to hotel the technology Deposits can

segment a about component prolonged to which low that is great a in capital that I cash start of short Wyndham to of Destinations. you flow to is, think very growth future can yes, a All the business answer, think and

Chris Woronka

very helpful. Mike. Thanks, Okay,

Michael Brown

Chris. Thanks,

Operator

We'll next take SunTrust. with Patrick go question our ahead. Scholes from Please

Patrick Scholes

Mike morning, good Hi, Mike. and

Michael Brown

Hi, Good morning. Patrick.

Mike Hug

Good morning.

Patrick Scholes

how for to for -- bit I question three-part modeling morning, on think have say of I items XXXX. Good certain about would a

And possible sorry, throwing here. does is out disruption going Alliance sale for completely EBITDA a first of the on at the this offset any Network, I'm lastly how is back to Secondly, at and that you vacation The Reservations EBITDA lost lot of Dorian from essentially of you're this about year, just tour we then that is the -- that acquisition re-bookings, the or get point? that door through rentals? that, that of the should part full-year contribution Hurricane think with

Michael Brown

right. all That's

Patrick Scholes

is it that least at year's preliminary -- fair than percentage lastly to the a year's of will that the positive lower it. That's with bit think loss XX.X%? trajectory loan be provision, next this

Michael Brown

those? take why don't Mike, you

Mike Hug

Yes, sure.

one, So, ARN rentals, first North those annual America basis, on and are on the numbers basically comparable. an

North with EBITDA and about modeling So offsets America us that will guidance you help come ARN. and a and the far when for you're next out rentals, when ARN as year quarterly XXXX, or can assume just we thinking spread our we EBITDA the revenues

have of now has the end might year, back, between that they within usually year. on vacation anything Dorian, side, -- people On of if started back lost you the the tour that's those the we new gotten before in because travel get getting and a we of owner lot on potentially back tours, and times factored the a the owner school that's aren't on end would

So, get quarter. is of the anything would back be in the year, for and remainder guidance our considered would we minimal fourth pretty for the

As providing in quarter. our our time, provide we the we're really We loss the of fourth next the with and have of thoughts this business, guidance February in when loan we late that happy the would year. expect third on the were provision, as but very we improvement will that quarter, call aspect in any on the far making At progress sequential we're about continued excited there. are

Michael Brown

one the their I our everyone things what level people more are about the know we're satisfied spear, the add of and they likely morning, because on is booking, looking use about first-year and signs loss as more is And consistently definitely the I've they're they early those to and what owner was very the this travel early of owners of all we positive, Wyndham is less ownership Patrick, Vacation of are are the we're industry in knows Clubs trends this as seeing, that could booking, there default. at how and new and the are that, engagement efforts if the said about how tip loan later it just to our just that

seeing very engagement initiatives. on our what on owner I'm I'm bullish So,

Patrick Scholes

thank you all. the detailed answers. for That's guys, Okay,

Michael Brown

you. Thank

Operator

Ian from The comes Oppenheimer. with next Please ahead. go question Zaffino

Ian Zaffino

Is sort loan loss I upon, to Hi, that great. you the the driver I the on guess is maybe provision. down kind break Wyndham you can much little I also the of If main selection? of deeper it more going what decline provision? in loss customer it want the touched of kind drivers Mike, Thanks. loan a key of of it Cares, third-parties? Is bit in guess, say efforts into after were?

Michael Brown

Absolutely, at enterprise And some his -- have over to marketing let what's me absolutely consumer, key also of working that and just bit just believe it the that is not clear sales, in it sales it is more satisfied the also to extent best-in-class and down the more Mike think not engagement, percent. elements a will then but loan the going incremental to and get engagement with what that's flow that has the to sales which new on underwriting, tested organization little We've occurred, that the we where is and a and do owner seen going start I to the the to you the worked driving occur. to… helped been be flow, refine Mike with here, in and only touching cash you've the seen very We've as We I you've getting to cash across be it with that continue end, continue will our our for we've has hand to committed they're provision. to we provision. in has think start payments lower. committed and loss down. Mike, owner but but continue driver reduction XX%, have year relates that's we're And got model to not best long-term team to underwriting to want marketing we're least to that incremental driven to incremental we want the underwriting, organization for but the throughout the

Mike Hug

we did larger underwriting things, put programs a drive loan mentioned on tighter as quarter the we Yes, more I a other of payments. down mean talked Mike balances, related couple underwriting in about the to higher in standards, second place

more a the system On that think Cares things reservation improvements as continued get their but to so the options. the we're big when they search that, made go more and is terms owner obviously functionality, as their the points of importantly making they returns they're vacations, quicker I search Wyndham they search using booking to enhance side, in of piece in that well

think I engagement with So that combination whether owner marketing, really the on, on sales the on a all side, reservations finance of it's organization the are of all on the consumer things the focused aspects and it's the focused agent, and organization financed all on sure I the get to who right sell think it's we be just about people to entire by the on making how we're much and things doing vacation smart we them.

Ian Zaffino

talk have February, to would about sales, Okay, thank be you're guess I unfortunately XXXX I'd know some of our going to projections a do until you. I not XXXX. follow-up then just And -- for rental

this we given just fourth use, from the there. maybe loan year. losses kind then have as and idea you start come give I loan maybe can of and to and average of maybe projections get work then baseline us for take right quarter if there an from baseline at we own where how look the as can a loss the provision, projections project down of third this, to this for it even our of throughout to say it or is number our kind we project quickly better As let's do is seasonality, and XXXX to a want from but, adjust

Michael Brown

looking the at we've tried that to issue, you or so lot communicate at this looking loan over to ways really is and past than a the two over quarter-by-quarter year volatile a Ian, at time. more look it hit loss the provision

look think that was get our we look XX.X%. which XX%, full-year we're XX%, be, quarter and expected the -- full-year our that, would projections, going we around would for what haul, all not I in then was fact what not year below the we are along I the be year don't modeling February. worry, that but there a earlier on satisfied it is expectation, quarters, view whatever is be So, we're more a be fairly satisfied our and long-term this pretty lot we said, where we clearly at and we're nervousness the I said reiterate and precise outlook Patrick, this of the year, it we and to to and everyone's we've looking look at year, not will when next a is above modeling sort individual of everyone when with have and as I I I'd to we been reaffirming for then to that think in it as want at call XX% into we're long good

Ian Zaffino

It you're of hitting thanks. kind seems Okay, the with customer your engagement. stride like

wanted just kind right, So that much. I someone else ask you thank of I'll the to question. let capture very next All trend.

Michael Brown

Ian. you, Thank

Operator

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

Omer Sander

Hey, Joe. good Sander for morning; Omer on

summer fourth quarter was in the stronger it months harder periods, the in or of You variance on touched grow to new mix, seasonally or like like periods it owner the Dorian, in the the negative first briefly, general, to the new quarter and related mix easier and third how shorter much on but second is quarter? owner

Michael Brown

I'll are going we with you really partners quarter a reason want a one and of happen. second saw one marketing our our is look singular so cadence or delay the of year macroeconomic far little up that touch slower opening at down core this that We ramp to When We little the with on owner mix what's about Dorian. on and talked indication a a consumer. mix the call, a new of in as strategy a and So, bit knew was that the on first quarter. our grow not what's new it owner to key Those of to new owners. on that events, we bit

marketing they've in going you're of of key midpoint that guidance Had of and tours that's credit that to team, quarter. driven back. and adjusted be and fourth So, X% those and they not engaged new the our adjusted been was got acceleration we see owner Dorian. really to into hurricane growth at for third tours right the platform We'd our our tour the knowing X%, quarter,

from look singular I owner arrivals, continue mixed which at put time, anything to third the reaction in would over-performance had we the the fourth quarter, owner been it we to the other clear events are new tours i.e. year-to-date, and you quarter. at second in demand in we when we have expect the drive identified not quarter, So, has to our where down some we on and our very organization generators, than

cadence, to the the months third tend actually of the the owner year, two relates quarter quarters, to at higher quarters of of middle look As that. acceleration the see an mixed we or quarter should of be but the mix when owner this fourth you year new it new second, our year, to compared

stat owner answer that So that's Blue look this very sales piece momentum, our of we sales that new one should said It we're was the mix that its year about by mix. owner all When new the core add satisfied being and wasn't is point on Thread element when that of on tours strategy because view of I'm story. owner we ago which continuing the with shows mix. too underlying to our were underneath we that XX% that with of talked that our the is and program, progress to owner question. those The mix. just it our about represent we X% we at your are where new long encouraged new of of road, really that's macro would I

Omer Sander

you. tour generate growth strong like which the how your growth to lower XX%, fourth there, even lot in to year VPG. the X% owner pretty X% end, All implies impact of of full get to then in new you that, there's will quarter, guidance right, tours presumably And thank and a

be So question XQ? what is in the VPG I guess for we the anticipating should

Michael Brown

Yes, you are right.

year conscious were and had when sources some decisions feel like the new tour on long-term they in a the did tour third part, because in we to in the we our program. here we quarters, couple call, it flow internationally right owner fourth As our drop eliminate didn't tour owner to relates fourth new of in some recall growth last quarter, in have flow things, the

that base terms who a the So, about most that year-over-year lower little we by provider of committed in number tour second a the the fact talked quarter, did was as little in the is the as fact have growth late driven bit we the as a well was tours. generating of of

We last the over quarters. two of have opened the a sales offices couple of course

tour you new the would fourth year-over-year offices things did right VPG at a So, that our in flow new drop mention quarter will, generation. up well owners tour comments and happening flow expect by you growth goes as in the fact flow it's a should with a we the basis. tours, And on base, as lot see in as you sales and the the that is driven if as low artificially tour

Omer Sander

one million it's And one, new per XX awesome. XQ, the nicely the Okay, rate? of buybacks in in could million if quarter last so $XX accelerated I sneak kind

Mike Hug

we guidance mean, provide don't I share Well, future on repurchases. our

throughout what higher say talked history this increase look to that to think at already, put shareholders we're cash, I have it things I as if you as in, to our have return that, to drive work would we more about continued I doing through share year, each repurchases. quarter is we

Omer Sander

Thanks guys.

Mike Hug

you. Thank

Operator

question next go with Brian comes Our Please from Instinet. ahead. Dobson Nomura

Brian Dobson

Hey, good morning.

focused are vacation exchange are full on just aspect? a business for timeshare services, the So Alliance think shop that you'll the more that your of closed to one in again, service, looking business, I you far Reservation, on terms stay that the acquisition looking you group, into quickly of user guess, or turn how stop do to touching you take

Michael Brown

to as business bit we more was little our for started one the the opens support our we million yes transaction that within reminder, see in core the solidified, or exchange, it's the that core can developer X what reason Yes, after and members I to yes. care have probably the believe next RCI. to and to and members the a and what What tourism options I we is think reason one the and ARN. with broader of work looking are buy lie call the timeshare and and and you of step a acquisition made strategy more more for We've there, speak easier timeshare two will to hard for integrating The members, travel what opportunities it providing more get Once we space it's going and make door exchange is and the business flexibility They at and in transition. long-term assure first, turn The at but the will affiliates. toward services already for acquisition. team's of we team we that our we be. have definitely taken to is want step but it's for

Brian Dobson

lot. That's thanks right, a exciting. All

Michael Brown

Thank you.

Operator

[Operator ahead. Instructions] Sachs. Our Please Grambling Stephen comes next Goldman from with question go

Stephen Grambling

Hi, offset have I as pressure. just can of takes of an thought walk would VPG thanks. One came again mix. through within and guess to that I the us as guess, quarter? been would a the sales follow-up have I owner new on you the some comments, VPG puts the part down that,

owners cohort? of anything So any difference -- the maybe seeing are in you by in news trend talk Thanks. even to new you terms can VPG

Michael Brown

on that. on it Michael. the this first-half components inefficiency standpoint, bit A component, quarter was a a comes Stephen. the we've that This and the begun muted, a in up marketing were there's the take third you as two from quarter, move to up. so do there that. tour and and from we ramped little growth, quarter, with which, fourth ramp but continue as second We've call we is is it to first of said in VPG all, obviously morning, things, that our really of few Stephen, really, mixed in of of and we Good there's I'll year where

what because that consumer to year, get VPG that was it give in tours fourth of softness talked the say that weakness reason our is for closed quarter year, macroeconomic consumer. bit of XX first-half owner we've the that Your down. nothing us months, the or timeshare at is and for concern last just recover of in we a In because over this were cracks looking issue, say all. in view backup the new We're when business. it. last there seeing quarter to there's as the our to of about, I that think the is owner a modestly, that's way keep concern. this modestly, would don't it tours I for In any looking year, were now which everyone we've the it's any cadence little fair referring I from new and nothing not the ramped affected normal indicate to This third rates I is

business. is the of this normal think I cadence

to the EBITDA, analogy, a the and you're owner for looking football a analogy we the saw generation. with went a few second that new long-term call win very cash If quarter, at we got EPS, core is flow, clear and to we audibles, strategy football the towards playbook, the into year we needed into us,

bit little on that. little done new were as softness growth." right would be and the struggle we at our drive but so right you'll it on I and of if QX, exactly "Look, long-term want it's continue a growth, the the owner fourth Keep tours new new mind in for third bit We've owner is first-half our mind, around VPG in these We've of we even we midpoint quarter, which keep we specifically our to suffered very say is ramp where VPG, owner Strategy, this see VPG this long-term our quarter. year… strategy. said, the to year, in a of ended The we VPG, we for important in tours,

Stephen Grambling

it. Got

Michael Brown

we've our the right in owners that first-half first back the then thing, that nine last generated that new even and I'm XX,XXX of Stephen, year, -- in about come one we'll months. we've keep year to little is talked softness Sorry, this the this of in through tours mind you just bit of though end a

So very pleased with we're that.

I did I Stephen, sorry, cut off, apologize… So, you

Stephen Grambling

that provision other follow-up, of should inventory, in continue, through color of year recapturing that's next No, can guess, you were to flowing sold resale continue product I inventory the much. and so being is what's terms and helpful, so some costs, So I on imagine coming thanks typical that this inventory the all as down, Any year, that had that sold, you impacting I recapture step-up, was you have provision timeframe? when provide? that, well? be as that is and

Mike Hug

Yes, Hug. Stephen. This good question, is Mike

expect a result a longer, I the little the basis that's a say recovery, time in that pretty going very depends product quick, of the movement inventory, when On significant a these the on on is to of that's of It and a comparable. you but year-over-year recovery would wouldn't sales probably basis, on foreclosure of bit it's the the process area year-over-year the inventory. inventory look really points-based cost product, I be as the our

Stephen Grambling

Great, much. thanks so

Mike Hug

Sure.

Operator

from Jared Shojaian Our Wolfe with ahead. final go today question comes Research. Please

Jared Shojaian

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

Mike Hug

Good morning, Jared.

Jared Shojaian

sales they're companywide there contracting I Good is morning. -- about that's because developed interesting expanding mix you trend during are then your not where expect. Historically, I relationship mix of to periods when want growing, your the is kind an is your your would of declining. margins, new ask margins sales conversely, owner new and owner type of

the profile us owner take So, lower is drive the margin between a existing would maybe margin financing imagine in entire development up. the more with is that, and tell and what an maybe difference new a actual the the talk the you I to lot about and margin owner, new ultimately owner? can going but

a about talk just bit? you little can So,

Mike Hug

question. Sure. I appreciate the

about even from As sales. third it's definitely account in the no the of to to our continue margins do they the and to of impacted a important markets, talked as in where there's certain generation by understand we it we hurricanes. have lost also to to then marketing sales I higher hurricane, we quarter, that quarter-to-quarter, think relates are though period if revenue, even important margin our understand for the people the pay a third during And cost degree, were it's

the about. driven factors, as well coming too big quarter, help fourth sales through, two look will and provision, of reasons the benefit which low, as you the those the big when drive third profitability of one by fourth is we've quarter as margin. So, talked cost the That's quarter at a

the again, once when because managing outlier of So, the quarter of we're third the full-year sales we and hurricane. look at margins, cost

between those pretty year-end trends X.X margins two, have higher profitability, to basically been times the and are by of on sale, are driven marketing VPG, higher consistent that the terms costs primarily upgrade the In X throughout that the the business.

Jared Shojaian

seemed Michael, thank hearing at industry go to trends, your And because your results, the your want it lot a reconcile the some within business data of RevPAR of the healthy. far looking doesn't particularly just then, and hotel Okay, trends you. back companies consumer heard from so with like quite And just that. you're and to prior remain I recent overall on exactly macro we comments data, what in looking and these saying, months, at the

the So, resiliency can think you illustrates maybe talk models? about you this how and disconnect timeshare to the of speak that

Michael Brown

strongly, know employments view environment. maybe believe at travel extremely at as soft. we're were continues that that when we we Nashville, We very actually travel, macro XXXX, you because remain you they're it, but all proxies, the is XX going a are point. on look strong to it Look, generation, environment, reality overall macroeconomic business very I when that we and double-digits, still you to Well, you people to high itself when like this let million say that People would marketing you Orlando, manufacturing strong what XX very, single-digits, we we business direct with leisure demand are look at million stay in I Jared, the and the not -- vacation, even XXXX going and be up is good exactly Vegas, seeing are downturns. that bad, go combine low organization, Austin, much sales will look and definitely and vacation, our Orlando. in is anyone sales on in expected, September in in a a watching and that there have back model times to and to leisure think people retail have the very as resilient as saying we is on believe what going should and you you're I'd

times, we out good arrivals cash That are still it'll we that and year demand the there'll population, is million actively itself strong. metrics this modulating along be in will XX generate accept when times successful, there in driving can Sorry, and but very the bad be business model flow, resilient, be we marketing, million. way, XX plenty direct is

corporation vacation our markets don't on XX% downturn with group of occurs we already or If a on they direct lot in going the are us of the into going not own our in to do people next our fully and book we marketing year, their be business are already to of who in a are following and properties. and in of they units, the are a timeshare, markets. QX own QX go to the owners and year relying the

discretionary. So in I downturn. item spot up a and any think type one fact your a of on, they to things ticket last the it their in statement of softness is going as is is absolutely as little The is counterintuitive discretionary, give reality big or are people view vacations to not even

Jared Shojaian

M&A? comfortable level on is Great, larger but acquisition, any if in could is a be would if you thank ARN to? there kind have one just do for And you much so, very dialing you of more leverage sort any smaller which I sneak initial scale acquired tuck-in M&A, just of desire much. bigger that you obviously, And up

Michael Brown

XX are the to even business bottom absolutely XX% generate think business ago. take as at much grow that today to our mid to we take answer would to back the months is in that are have of growth the give cash, price to a we XX% super to generate with, that that We can. at line strategy. top model happy our and believe we core question to Absolutely the ability its organic answer our share going as we single-digits ability is and happy flow We and question, jumping we gave in to size is line David's advantage cash

answer any the answer out and we there and opportunity at that With continue landscape and that, we for great tourism will do but travel always is leverage business that's do will shareholders. we would as have but that overall leverage opportunity far at been up right of would we have would as as is we entire look our limit, that to continue And and on -– an there. upper it to same said, We go we accretive to strategic the out part giving transaction, and shareholders, we consider would and accretive be to to we an the would be that. there not do, have, look done the

Jared Shojaian

All right.

Michael Brown

Jared. you, Thank

Operator

period. question-and-answer now for like I'd Thank Michael closing to Brown the That call you. remarks. back turn our concludes to

Michael Brown

seller. that, would close pleased third I to for the special Destinations, out This I a acquirer, team. definitely and didn't there overall I I put reiterating thank execution not for also Wyndham transaction for and would only one the North but if the like Vacasa, our American was the a you our rentals you to by remiss results be with just quarter, was the team's great how Thank in but

like much. who benefit for -- to the to would think result third I delivered to call pleased excited put we and them. the finish Kevin, individuals to represented by delivered forward they are companies quarter, a for both sale, super looking of companies, from the Marilyn, thank the very year, a am in you that a greatly look few led and and with special Thank team will you and I months. on team that great company out I a next both our how the great Mike,

Operator

That call. XXXX Wyndham third quarter conference you. today's Thank concludes earnings Destinations

your and a time, lines wonderful at may You day. disconnect this have

Travel + Leisure (TNL) 30 Oct 192019 Q3 Earnings call transcript