What happened
Bluegreen Vacations (BVH) saw a sharp drop in its share price on Monday, as it was down as much as 24.5% in morning trading. At 1:30 p.m. ET, the stock price was down about 22.1% on the day. It was trading at around $24.50 per share, down about 1.9% year to date.
The major indexes were all up on Monday as of 1:30 p.m. ET as the S&P 500 was up 6 points (0.2%) the Dow Jones Industrial Average was up 27 points (0.1%), and the Nasdaq Composite had gained 76 points (0.7%).
So what
Bluegreen Vacations, a timeshare vacation ownership company, dropped sharply after it released its fourth-quarter earnings on Monday.
The earnings were a mixed bag as revenue climbed 17% year over year to $238 million in the quarter. Sales of vacation ownership interests (VOIs) jumped 12% year over year to $187 million.
Image source: Getty Images.
However, earnings per share (EPS) was down 30% to $0.41 per share, on $7.6 million of net income. But minus a $6.6 million charge for exiting certain underperforming marketing locations, diluted EPS from continuing operations was up 5% from the previous year's fourth quarter to $0.61 per share.
These results beat consensus revenue and earnings estimates.
The full-year numbers look much better, as revenue was up 21% to $919 million, net income was up 11% to $64 million, and diluted EPS from continuing operations rose 16% to $3.24 compared to the previous year.
Now what
Some concerns that may have spooked investors were that sales and marketing expenses were up 17% year over year in the quarter, while there was a 14% drop in vacation packages sold.
Chairman and CEO Alan Levan said the drop in vacation packages sold reflected the "challenging labor market which affected staffing levels and resulted in increased turnover and consequently impacted package sales at our marketing kiosks." He also said the decrease reflects lower traffic in its retail locations.
An objective for 2023 is to increase the efficiency of its marketing spending and lower new customer acquisition costs, said Levan. Toward this end, the firm exited some underperforming or hard-to-staff marketing locations in December, which resulted in a charge of $6.6 million.
Bluegreen has a solid balance sheet and a decent valuation, but economic conditions and uncertainty cloud its near-term prospects.
