Choice Hotels International Inc
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +5.69%.
Did CHH Beat Earnings? Q1 2026 Results
Choice Hotels International delivered a mixed first quarter for 2026, with revenue edging ahead of expectations while earnings fell well short of the mark. The Rockville-based franchisor posted revenue of $340.57 million, up 2.3% year over year and modestly above the $333.81 million consensus estimate, but adjusted diluted EPS of $1.07 missed the $1.32 consensus by 18.80%, weighed down primarily by a temporarily elevated effective tax rate and timing-related cost factors that management expects to normalize to roughly 25% for the full year. Beneath the headline numbers, development momentum stood out, with U.S. room openings rising 32% year over year and global franchise agreements awarded jumping 72%, building a pipeline exceeding 77,700 rooms. The company's Canadian operations also contributed a bright spot, with RevPAR climbing 5.2% following a direct-franchising transition. Choice Hotels maintained its full-year 2026 guidance, targeting adjusted diluted EPS of $6.92 to $7.14 and adjusted EBITDA of $632 million to $647 million, signaling confidence that the quarterly earnings shortfall reflects timing rather than structural pressure.
- Revenue excluding reimbursable costs increased 3% to $216.7 million
- U.S. royalty rate expanded 11 basis points to 5.22%
- Global net rooms grew 1.7%, driven by 2.5% growth in higher revenue extended stay, midscale, and upscale brands
- U.S. room openings increased 32% reaching highest first-quarter level since 2023
- U.S. RevPAR comparison impacted by approximately 410 basis points from prior-year hurricane effects
- Adjusted EBITDA declined to $125.7 million from $129.6 million reflecting timing-related factors
- Adjusted diluted EPS declined to $1.07 from $1.34 due to timing factors and temporarily elevated effective tax rate
- International net rooms grew 13% with 59% increase in room openings
“Choice Hotels delivered first-quarter financial results in line with expectations, with key operating indicators signaling an inflection point in underlying trends.”
Choice Hotels CEO, on the earnings call
Forward Guidance & Outlook
Choice Hotels is maintaining its full-year 2026 outlook: net income of $265–$275 million; adjusted net income of $320–$330 million; adjusted EBITDA of $632–$647 million; diluted EPS of $5.72–$5.94; adjusted diluted EPS of $6.92–$7.14; effective tax rate of approximately 25%; global RevPAR growth of -2% to 1%; U.S. RevPAR growth of -2% to 1%; U.S. royalty rate growth in the mid-single digits; global net system rooms growth of approximately 1%. Adjusted SG&A is expected to grow at mid-single digits. Net capital outlays for hotel development are expected to decline significantly from $103.4 million in 2025 to $20–$45 million in 2026.
CHH YoY Financials
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Figures from SEC filings and company reports. Not investment advice.