Shares of Expedia Group (NASDAQ: EXPE) were pulling back today after the online travel agency posted strong results in its first-quarter earnings report, but offered disappointing guidance for the second quarter.
The stock was down 13.4% as of 11:28 a.m. ET.
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Expedia delivers solid results but sees slowing growth
Expedia posted 8% revenue growth to $2.89 billion, which topped the consensus estimate at $2.81 billion, however, bookings growth was a bit light, foretelling slowing growth in the key summer months. The company also cited weakness on its Vrbo vacation rental service as it brought the site onto Expedia's platform, allowing Vrbo customers to take advantage of Expedia's loyalty program.
Gross bookings rose just 3% to $30.2 billion in the quarter even as booked room nights were up 7% to 101.2 million, showing that price per room night came down.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 38% to $255 million, and adjusted earnings per share improved from a loss of $0.20 in the quarter a year ago to a per-share profit of $0.21, which was well ahead of the analyst consensus at a loss of $0.24.
CEO Peter Kern said:
Our first-quarter results met our guidance with a revenue and earnings beat but with less robust gross bookings. We saw continued momentum in B2B, Brand Expedia, and Advertising. However, Vrbo's recovery following the recent replatforming has been slower than anticipated.
Can Expedia bounce back?
The slowing growth heading into the summer is certainly disappointing, and the company lowered its full-year revenue guidance to mid-to-high single digits, which was below the analyst consensus at 9.4%.
It's not surprising that Expedia would be down on the news as the summer months are crucial in the travel business. While the company should overcome these headwinds, the sell-off in the stock makes sense.
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