On November 7, 2023, Sunstone Hotel Investors Inc (SHO, Financial) announced its results for the third quarter ended September 30, 2023. Despite the challenges posed by the Maui fires, the company managed to deliver earnings above the high-end of its guidance range.
Financial Highlights
Net income for Q3 2023 stands at $15.6 million, marking a decrease of 24.1% compared to the same period in 2022. Income attributable to common stockholders per diluted share is $0.06, a decrease of 25.0% year-over-year. Despite these decreases, the company's actual results for the quarter ended September 30, 2023, outperformed its previously provided guidance.
Comparable RevPAR (Revenue Per Available Room) remained stable at $222.54, with a 0.0% change YoY. Comparable occupancy increased by 140 basis points to 72.8%, while Comparable ADR (Average Daily Rate) decreased by 1.9% to $305.69.
Key Developments
Shortly after the end of the quarter, SHO closed on the sale of Boston Park Plaza for an attractive all-cash price of $370 million. The company is currently evaluating opportunities to reinvest the sale proceeds into assets that will generate higher growth, superior returns, and greater per-share net asset value.
In October 2023, the company converted its Renaissance Washington DC to The Westin Washington, DC Downtown, following a transformative renovation. The repositioned hotel is expected to attract additional occupancy and garner higher rates, thus increasing the earnings potential and value of the hotel.
Balance Sheet and Liquidity Update
As of September 30, 2023, SHO had $185.0 million of cash and cash equivalents, including restricted cash of $71.2 million, total assets of $3.1 billion, including $2.6 billion of net investments in hotel properties, total debt of $819.6 million, and stockholders’ equity of $2.1 billion.
Outlook for Q4 2023
For the fourth quarter of 2023, the company expects a net income of $125 to $130 million and an Adjusted FFO Attributable to Common Stockholders per Diluted Share of $0.14 to $0.17.
Despite the challenges faced in Q3 2023, Sunstone Hotel Investors Inc (SHO, Financial) managed to deliver earnings above the high-end of its guidance range, demonstrating the company's resilience and strategic financial management.
Explore the complete 8-K earnings release (here) from Sunstone Hotel Investors Inc for further details.
