Expedia Shares Fall After Lowering Full-Year Guidance
Expedia Group (EXPE) shares took a hit early Friday morning after the travel booking company announced that it was lowering its full-year guidance. The company reported a narrower-than-expected loss for the first quarter, but weak performance from its vacation rental platform Vrbo and its business-to-consumer segment weighed on its results.
Lowered Guidance
Expedia cited lackluster performance from its vacation rental platform Vrbo and its business-to-consumer segment as the reason for lowering its full-year guidance. The company operates a number of brands, including Hotels.com, Vrbo, Travelocity, and Hotwire.
Expedia Group CEO Peter Kern stated in a release, “Given the Vrbo drag and the rate of acceleration in B2C thus far, we are lowering our full-year guidance to a range of mid to high single-digit top-line growth with margins relatively in line versus last year.”
Kern also mentioned, “Vrbo’s recovery following the recent re-platforming has been slower than anticipated, which has put pressure on gross bookings. As we enter the second quarter, we are seeing some acceleration in the rest of our B2C business and expect it to continue throughout the year.”
Q1 Revenue in Line With Estimates
For the first quarter, Expedia reported a net loss of $135 million or 99 cents per share, compared to a loss of $145 million or 95 cents per share in the same period last year. The company’s revenue of $2.89 billion was up 8% from a year ago and in line with analyst estimates. Gross bookings rose 3% to $30.16 billion.
CEO Peter Kern To Step Down
Expedia shares had previously dropped back in February after the company reported booking numbers that missed expectations and announced a new CEO. Thursday’s report will be Kern’s last as CEO, with current Expedia for Business President Ariane Gorin set to take over the role later this month.
As of 8:40 a.m. ET on Friday, Expedia shares were down 10.7% at $121.50 in pre-market trading.
Conclusion
Expedia’s decision to lower its full-year guidance due to underperformance in its vacation rental platform Vrbo and its business-to-consumer segment has had a significant impact on its stock price. Investors will be closely watching how the company navigates these challenges under new leadership in the coming months.
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