Travel + Leisure Co. Announces Q2 Financial Results, Shows Mixed Performance
Travel + Leisure Co., a leading company in the Hotels/Resorts/Cruise lines industry, recently announced its financial results for the quarter ending June 2024. The company's stock has been given a 'Strong Sell' rating by Infinhub.
According to the financial report, Travel + Leisure Co. has shown a flat performance in the quarter, with a net profit of USD 161 million. However, the company's net profit has seen a positive trend in the near term, growing at 50.36% over the average net sales of the previous four periods.
One of the key factors contributing to the company's success is its ability to manage raw material costs. The cost of raw materials has fallen by -0.67% year-on-year, and the company has been able to pass on these savings to its customers, leading to an improvement in profit margins.
On the other hand, there are some areas where Travel + Leisure Co. needs to focus on. The company's operating cash flow has been the lowest at USD 287 million and has fallen in each of the last three years. This indicates a decline in cash revenues from business operations.
Moreover, the company's interest costs have increased by 50% quarter-on-quarter, which could be a result of increased borrowings. The interest coverage ratio, which measures the company's ability to manage interest payments, has also been the lowest in the last five periods.
Additionally, Travel + Leisure Co. has seen a decline in short-term liquidity, with cash and equivalents at the lowest level of USD 647 million in the last six semi-annual periods. The company's pace of selling inventory and debtors has also slowed down, with the inventory turnover ratio and debtors turnover ratio at 0% in the last five semi-annual periods.
Overall, Travel + Leisure Co. has shown a mixed performance in the quarter ending June 2024. While the company has seen a positive trend in net profit and raw material costs, it needs to address its declining cash flow and rising interest costs. Investors should keep a close eye on the company's financials in the coming quarters.