Choice Hotels Prepares to Report Q4 Results: Key Things to Watch

Choice Hotels International, Inc. CHH is scheduled to report fourth-quarter 2025 results on Feb. 19, before the opening bell.

CHH topped the consensus mark in two of the last four quarters and missed on one other two occasions, the average miss being 0.6%.

Trend in CHH’s Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share (EPS) has remained unchanged at $1.56 in the past seven days. The estimated figure indicates a 0.7% increase from $1.55 per share reported in the year-ago quarter.

The consensus mark for revenues is pegged at $380.3 million, indicating a decline of 2.4% from the prior-year quarter’s reported figure.

Let’s discuss the factors that are likely to be reflected in the quarter to be reported

Factors to Note Ahead of CHH’s Q4 Results

Choice Hotels’ fourth-quarter 2025 revenues are likely to have been supported by net rooms growth in higher-revenue segments such as extended stay, upscale and midscale, which generate higher royalty income. Improving small and medium business travel and group demand is likely to have helped occupancy and fee growth, while the expanding international portfolio, where RevPAR trends were stronger than in the United States, added incremental revenues. Partnership income, including co-brand credit cards and supplier programs, is also likely to have remained a steady tailwind. 

On the other hand, top-line growth is likely to have been pressured by a softer U.S. RevPAR backdrop, caused by weaker government travel and subdued international inbound demand. Tough comparisons from hurricane-related demand in the prior year and cautious consumer spending and transient segments are also likely to have limited revenue upside during the quarter.

Earnings are likely to have supported by Choice’s asset-light, fee-based model, higher average royalty rates from a richer brand mix and continued strength in international operations, which carry higher margins. Tight cost control, supported by productivity gains and technology investments, along with growing partnership revenues, is likely to have helped offset U.S. RevPAR pressures and protect profitability.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Choice Hotels this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

Earnings ESP: CHH has an Earnings ESP of -2.38%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3.

Stocks With Favorable Combination

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to beat estimates this time around.

Las Vegas Sands LVS currently has an Earnings ESP of +1.59% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the to-be-reported quarter, Las Vegas Sands’ earnings are expected to increase 27.1%. Las Vegas Sands’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 19.5%.

Pool Corp. POOL currently has an Earnings ESP of +1.01% and a Zacks Rank of 3. 
In the to-be-reported quarter, Pool Corp’s earnings are expected to register a 2.1% year-over-year surge.

Pool Corp’s earnings surpassed estimates in three of the trailing four quarters and missed once, with an average beat of 0.2%.

PENN Entertainment, Inc. PENN has an Earnings ESP of +7.03% and a Zacks Rank of 3 at present.

In the to-be-reported quarter, PENN Entertainment’s earnings are expected to register a 54.6% year-over-year increase. PENN Entertainment’s earnings beat estimates in two of the trailing four quarters and missed twice, with an average beat of 59.1%.

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This article originally published on Zacks Investment Research (zacks.com).

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