The 18.8% EPS miss and 54% net income decline are significant negative surprises that will pressure the stock. Monitor the Q2 2026 earnings call for any revision to full-year guidance and for signs that the 'timing-related factors' cited by management are reversing. The maintained guidance provides a floor but credibility is at risk given the magnitude of the miss.
Price Chart
Executive Summary
Choice Hotels reported Q1 2026 GAAP diluted EPS of $0.44 and adjusted diluted EPS of $1.07, a 20% decline from $1.34 in Q1 2025, missing the $1.32 consensus estimate by 18.8%. Total revenues reached a record $340.6M (+2.3% YoY), but net income fell 54% to $20.3M, and adjusted EBITDA declined 3% to $125.7M. The company maintained its full-year 2026 outlook, but the sharp earnings miss and declining profitability signal near-term headwinds.
Key Financial Metrics
Key Facts
- GAAP diluted EPS of $0.44 vs $0.94 in Q1 2025, down 53%
- Adjusted diluted EPS of $1.07 missed consensus of $1.32 by 18.8%
- Net income fell 54% to $20.3M from $44.5M in Q1 2025
- Total revenues of $340.6M (+2.3% YoY) were a company record but below $333.8M consensus
- Adjusted EBITDA declined 3% to $125.7M from $129.6M in Q1 2025
- U.S. RevPAR declined 2.3% YoY; global RevPAR down 0.8%
- Full-year 2026 guidance maintained: adjusted EPS $6.92-$7.14, adjusted EBITDA $632-$647M
- Operating cash flow was negative $23.2M in Q1 2026 vs positive $20.5M in Q1 2025
- Company returned $75.2M to shareholders via dividends and buybacks in Q1 2026
- Global net rooms grew 1.7% YoY; franchise agreements awarded up 72%
Financial Impact
Adjusted diluted EPS of $1.07 missed consensus of $1.32 by $0.25 (18.8%), representing a ~$11.6M shortfall in adjusted net income vs expectations
Risk Factors
- Continued U.S. RevPAR decline (-2.3%) driven by hurricane comps and softer demand
- Negative operating cash flow of -$23.2M in Q1 2026 vs positive $20.5M in prior year
- Net debt-to-adjusted EBITDA ratio increased to 3.2x from 3.0x at year-end 2025
- Temporarily elevated effective tax rate pressuring EPS
- Potential for full-year guidance reduction if Q1 weakness persists
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001046311-26-000017 |
| Document: chh-20260430.htm | 0001046311-26-000017 |
| Document: 0001046311-26-000017-index-headers.html | 0001046311-26-000017 |
| Document: 0001046311-26-000017-index.html | 0001046311-26-000017 |
| Document: 0001046311-26-000017.txt | 0001046311-26-000017 |
| 8-K Data (Synthetic) | 0001046311-26-000017 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 31, 2026 4w ago | 8-K | $103.36 $104.25 | ▲ +0.86% | ▲ +1.05% | $103.42 (+0.05%) |
Aug 26, 2026 5w ago | Court Ruling | $109.86 $100.96 | ▼ −8.10% | ▼ −8.24% | $103.42 (−5.87%) |
Aug 14, 2026 7w ago | Court Ruling | $104.44 $96.54 | ▼ −7.56% | ▼ −5.57% | $103.42 (−0.98%) |
Aug 14, 2026 7w ago | Court Ruling | $104.44 $96.54 | ▼ −7.56% | ▼ −5.57% | $103.42 (−0.98%) |
Aug 7, 2026 8w ago | Court Ruling | $106.66 $100.62 | ▼ −5.66% | ▼ −5.27% | $103.42 (−3.04%) |
Aug 5, 2026 8w ago | 8-K | $111.79 $100.40 | ▼ −10.19% | ▼ −9.59% | $103.42 (−7.49%) |
Jul 1, 2026 13w ago | 8-K | $109.27 $115.65 | ▲ +5.84% | ▲ +8.02% | $103.42 (−5.36%) |
May 20, 2026 19w ago | DEFA14A | $111.49 $109.56 | ▼ −1.73% | ▼ −2.06% | $103.42 (−7.24%) |
May 20, 2026 19w ago | 8-K | $111.49 $109.56 | ▼ −1.73% | ▼ −2.06% | $103.42 (−7.24%) |
Apr 30, 2026 22w ago | 8-K | $99.08 $113.36 | ▼ −14.41% | ▼ −9.44% | $103.42 (−4.38%) |
US Market Status
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