Choice Hotels International (NYSE:CHH) Posts Earnings Results, Beats Estimates By $0.05 EPS

Choice Hotels International (NYSE:CHH) released its quarterly earnings results on Wednesday. The company reported $2.02 earnings per share for the quarter, topping the consensus estimate of $1.97 by $0.05, Briefing.com reports. The business had revenue of $440.76 million for the quarter, compared to analysts’ expectations of $431.52 million. Choice Hotels International had a net margin of 21.55% and a return on equity of 281.98%. The firm’s revenue for the quarter was up 3.4% compared to the same quarter last year. During the same period in the previous year, the company earned $1.92 earnings per share. Choice Hotels International updated its FY 2026 guidance to 6.860-7.100 EPS.

Here are the key takeaways from Choice Hotels International’s conference call:

• Raised full-year guidance for adjusted EBITDA to $635–$650 million, U.S. RevPAR growth to 0%–1.25%, global RevPAR growth to 0%–1%, and global net rooms growth to approximately 1.5%.
• U.S. rooms growth trends improved, with openings up 27% year over year, exits down 50%, and U.S. franchise agreements up 30%; management expects positive U.S. net rooms growth for 2026.
• Second-quarter adjusted EBITDA rose 6% to $175 million and adjusted EPS increased 5% to $2.02, supported by higher U.S. royalties, royalty-rate expansion, franchise services revenue, and international growth.
• Choice is accelerating its transition to an asset-light franchising model, with hotel-development outlays down 80% in the first half and initial asset dispositions expected in the first half of 2027, potentially improving future cash flow.
• Despite the stronger operating outlook, adjusted EPS guidance was set at $6.86–$7.10 because of higher expected interest expense and a higher effective tax rate; second-half comparisons also include a roughly $9.5 million unfavorable impact from nonrecurring prior-year liquidated damages.

Choice Hotels International Price Performance

CHH traded up $3.26 during trading on Wednesday, reaching $111.87. 828,813 shares of the company were exchanged, compared to its average volume of 579,395. Choice Hotels International has a 12-month low of $84.04 and a 12-month high of $126.60. The company has a market cap of $5.09 billion, a price-to-earnings ratio of 15.08, a P/E/G ratio of 4.31 and a beta of 0.67. The company has a quick ratio of 0.95, a current ratio of 0.95 and a debt-to-equity ratio of 14.58. The company’s 50-day moving average is $110.57 and its two-hundred day moving average is $108.32.

Choice Hotels International Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Wednesday, July 15th. Stockholders of record on Wednesday, July 1st were given a $0.2875 dividend. The ex-dividend date of this dividend was Wednesday, July 1st. This represents a $1.15 annualized dividend and a dividend yield of 1.0%. Choice Hotels International’s payout ratio is 15.50%.

Insider Activity at Choice Hotels International

In other news, CFO Scott E. Oaksmith sold 2,000 shares of the stock in a transaction on Friday, June 12th. The shares were sold at an average price of $110.00, for a total value of $220,000.00. Following the transaction, the chief financial officer owned 35,172 shares of the company’s stock, valued at $3,868,920. This represents a 5.38% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Insiders own 23.87% of the company’s stock.

Institutional Investors Weigh In On Choice Hotels International

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. UMB Bank n.a. lifted its holdings in Choice Hotels International by 6,416.7% in the 4th quarter. UMB Bank n.a. now owns 391 shares of the company’s stock worth $37,000 after buying an additional 385 shares during the period. Quarry LP purchased a new position in shares of Choice Hotels International during the third quarter valued at approximately $38,000. Arax Advisory Partners purchased a new position in shares of Choice Hotels International during the fourth quarter valued at approximately $43,000. Advisory Services Network LLC purchased a new stake in Choice Hotels International in the third quarter worth $57,000. Finally, Parallel Advisors LLC boosted its holdings in Choice Hotels International by 627.0% in the fourth quarter. Parallel Advisors LLC now owns 836 shares of the company’s stock valued at $80,000 after acquiring an additional 721 shares in the last quarter. 65.57% of the stock is currently owned by institutional investors.

Trending Headlines about Choice Hotels International

Here are the key news stories impacting Choice Hotels International this week:

• Positive Sentiment: Q2 earnings and revenue surpassed estimates: Choice Hotels reported adjusted earnings of $2.02 per share, ahead of the $1.97 consensus estimate and up from $1.92 a year earlier. Revenue rose 3.4% year over year to $440.76 million, exceeding the $431.52 million forecast. Choice Hotels Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Room growth improved: Global net rooms increased 2.6%, while U.S. net rooms growth improved for the second consecutive quarter. Continued expansion of the franchise network supports Choice’s asset-light business model and future royalty revenue. Choice Hotels International Reports Second Quarter 2026 Results
• Neutral Sentiment: Strong profitability continues: Choice posted a 21.55% net margin and 281.98% return on equity, although the company’s highly leveraged balance sheet remains an important consideration for investors. Choice Hotels Q2 Earnings Report
• Negative Sentiment: Full-year guidance leaves limited upside: Management forecast fiscal 2026 EPS of $6.86 to $7.10, with the midpoint below the $7.10 analyst consensus and below the $7.14 estimate cited by analysts. This could temper enthusiasm despite the quarterly beat. Choice Hotels Q2 Earnings Key Metrics

Analysts Set New Price Targets

A number of analysts recently commented on CHH shares. Deutsche Bank Aktiengesellschaft set a $114.00 price target on Choice Hotels International in a report on Monday, May 4th. Susquehanna reduced their price target on shares of Choice Hotels International from $115.00 to $110.00 and set a “neutral” rating for the company in a research report on Monday, May 4th. Barclays raised their price objective on shares of Choice Hotels International from $100.00 to $101.00 and gave the stock an “underweight” rating in a report on Monday, July 20th. Wells Fargo & Company lifted their price objective on shares of Choice Hotels International from $98.00 to $99.00 and gave the stock an “underweight” rating in a research report on Thursday, July 16th. Finally, Robert W. Baird set a $128.00 target price on shares of Choice Hotels International in a research note on Monday, May 11th. Two analysts have rated the stock with a Buy rating, eight have issued a Hold rating and four have assigned a Sell rating to the company. According to MarketBeat, Choice Hotels International has a consensus rating of “Reduce” and an average target price of $111.00.

Choice Hotels International Company Profile

Choice Hotels International, Inc is a hospitality franchisor specializing in the development and support of lodging brands across the economy, midscale and upscale segments. Through a network of franchisees, Choice Hotels supplies proprietary reservation and distribution systems, comprehensive marketing programs, and operational support services. The company’s core activities include brand management, franchise development, and technology-driven revenue optimization tools designed to enhance guest acquisition and retention for its partners.

Founded in 1939 as Quality Courts United, the company rebranded to Choice Hotels International in 1982 to reflect its expanding brand portfolio and global ambitions.