Home Mutual Funds Expedia Stock Tumbles as Vrbo Weakness Leads Travel Giant to Lower Its Guidance

Expedia Stock Tumbles as Vrbo Weakness Leads Travel Giant to Lower Its Guidance

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Key Takeaways

  • Expedia shares fell early Friday morning after the travel booking company lowered its full-year guidance Thursday.
  • Expedia reported a narrower-than-expected loss for the first quarter, and its revenue was in line with analysts’ estimates.
  • Weak performance from Expedia’s vacation rental platform Vrbo and its business-to-consumer segment weighed on results.

Expedia Group (EXPE) shares were down more than 10% in pre-market trading Friday after the travel booking company lowered its full-year guidance as weak performance from its vacation rental platform Vrbo and its business-to-consumer segment weighed on its results.

Lowered Guidance

Expedia said Thursday it lowered its full-year guidance, citing lackluster performance from vacation rental platform Vrbo and its business-to-consumer segment. Expedia operates a number of brands along with its namesake travel booking platform, including Hotels.com, Vrbo, Travelocity, and Hotwire.

“Given the Vrbo drag and the rate of acceleration in B2C thus far, we are lowering our full year guidance to a range of mid to high single digit top line growth with margins relatively in line versus last year,” Expedia Group CEO Peter Kern said in a release.

“Vrbo’s recovery following the recent re-platforming has been slower than anticipated, which has put pressure on gross bookings,” Kern said. “As we enter the second quarter, we are seeing some acceleration in the rest of our B2C business and expect it to continue throughout the year.”

Q1 Revenue in Line With Estimates

Expedia reported a net loss of $135 million or 99 cents per share for the first quarter, compared to a loss of $145 million or 95 cents per share in the year-ago period. Analysts had expected a slightly wider loss. Expedia’s revenue of $2.89 billion was up 8% from a year ago and in line with analyst estimates compiled by Visible Alpha as gross bookings rose 3% to $30.16 billion.

CEO Peter Kern To Step Down

Expedia shares had tumbled back in February as well after the company reported booking numbers that missed expectations and announced a new CEO. Thursday’s report will be Kern’s last as CEO, with current Expedia for Business President Ariane Gorin set to take over the job later this month.

Expedia shares were down 10.7% at $121.50 in pre-market trading Friday as of 8:40 a.m. ET.

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