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CL

Chatham Lodging Trust (CLDT)·Q3 2025 Earnings Summary

Executive Summary

  • EPS beat; revenue slightly missed consensus. Diluted EPS was $0.03 vs S&P Global consensus of $0.01, while total revenue of $78.4M was ~0.9% below the $79.1M consensus estimate (consensus values marked with ; Values retrieved from S&P Global).
  • Margins held up despite RevPAR down 2.5% YoY; GOP margin was 44% (-90 bps YoY) and Hotel EBITDA margin was 37% (-30 bps YoY), supported by labor efficiencies and lower property taxes .
  • Guidance reset lower: FY RevPAR growth now (-0.7%) to (-0.3)% (from 0% to +1%), FY Adjusted EBITDA narrowed to $89.2M–$90.8M, and FY Adjusted FFO/shr to $0.96–$0.99; Q4 RevPAR guided to $128–$130 with margins 29%–31% .
  • Balance sheet and capital deployment: upsized/refinanced unsecured credit facility to $500M; actively repurchasing stock (~1% of shares at $6.85 avg) and under contract to sell a 26-year-old hotel for $17.4M; leverage ratio at ~21% .

What Went Well and What Went Wrong

What Went Well

  • Rate discipline and margin control amid softer RevPAR: “Despite weaker than expected RevPAR, we were able to deliver adjusted FFO per share towards the upper end of our guidance range as our operating margins benefitted from labor efficiencies and lower-than-expected property taxes.” — CEO Jeff Fisher .
  • Coastal Northeast and Greater New York outperformed: Coastal Northeast RevPAR +2%; Greater New York +8% aided by the Ryder Cup; Hampton Inn Portland hit an all-time quarterly RevPAR high of $354 .
  • Corporate actions enhanced flexibility: $500M credit facility upsized (accordion to $650M), no revolver balance at quarter end; active buybacks (~505,652 YTD) and asset recycling progressing .

What Went Wrong

  • RevPAR softness and market-specific headwinds: Portfolio RevPAR down 2.5% to $151; Silicon Valley -4% (Sunnyvale weakness), San Diego -10%, Washington, D.C. -6% tied to shutdown impacts; Dallas -3% amid convention center closure .
  • Government shutdown and convention disruptions pressured October trends: D.C. hotels reduced October portfolio RevPAR by ~170 bps; Austin/Dallas convention centers closed; San Diego comped tough off record 2024 .
  • Revenue miss vs consensus and EBITDA below Street: Revenue of $78.4M modestly below consensus $79.1M*, and EBITDA of $24.5M vs consensus $25.8M*; adjusted EBITDA nonetheless in guidance range .*

Financial Results

Consolidated KPIs and Profitability vs Prior Year and Prior Quarter

MetricQ3 2024Q2 2025Q3 2025
Total Revenue ($USD Millions)$87.2 $80.3 $78.4
Diluted EPS ($)$0.05 $0.07 $0.03
Adjusted EBITDA ($USD Millions)$29.6 $28.5 $26.2
Adjusted FFO per Diluted Share ($)$0.35 $0.36 $0.32
GOP Margin (%)44% 46% 44%
Hotel EBITDA Margin (%)37% 39% 37%
RevPAR ($)$155 $155 $151
ADR ($)$195 $191 $192
Occupancy (%)79% 82% 79%
  • Versus S&P Global consensus: Revenue $79.14M* vs actual $78.41M (miss ~0.9%); EPS $0.01* vs actual $0.03 (beat). EBITDA consensus $25.75M* vs EBITDA $24.54M (miss) .*

Major Markets RevPAR (Comparable 34 Hotels)

Market (% of LTM Hotel EBITDA)Q3 2024 RevPAR ($)Q3 2025 RevPAR ($)Change vs PY
Portfolio (34 Hotels)$155 $151 (2%)
Silicon Valley (16%)$148 $142 (4%)
Los Angeles (10%)$175 $169 (3%)
Coastal Northeast (10%)$264 $268 2%
Washington, D.C. (9%)$153 $143 (6%)
Greater New York (9%)$182 $197 8%
San Diego (7%)$216 $194 (10%)
Dallas (5%)$86 $84 (3%)

Brand RevPAR (Brands >5% of LTM Hotel EBITDA)

BrandQ3 2024 RevPAR ($)Q3 2025 RevPAR ($)Change
Residence Inn (16 hotels; 52%)$163 $158 (3%)
Hilton Garden Inn (3; 7%)$204 $206 1%
Home2 Suites (2; 7%)$122 $119 (2%)
Courtyard (3; 7%)$94 $94 0%
Hampton Inn (2; 7%)$278 $280 1%
Hyatt Place (2; 6%)$153 $137 (10%)
Homewood (3; 6%)$127 $119 (6%)

Monthly RevPAR Trend (Comparable 34 Hotels)

MonthPrior Year RevPAR ($)Current RevPAR ($)YoY Change
July$160 $156 (2%)
August$148 $144 (3%)
September$158 $154 (3%)
October (Post-Q3)$165 $160 (3%)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevPAR GrowthFY 20250% to +1% (0.7)% to (0.3)% Lowered
Total Hotel Revenue ($M)FY 2025$295.8–$298.5 $293–$294 Lowered/Narrowed
Adjusted EBITDA ($M)FY 2025$89.3–$93.2 $89.2–$90.8 Lowered/Narrowed
Adjusted FFO ($M)FY 2025$48.9–$52.8 $49.2–$50.8 Narrowed
Adjusted FFO per Diluted Share ($)FY 2025$0.95–$1.03 $0.96–$0.99 Narrowed
Hotel EBITDA Margin (%)FY 202534%–35% 34% Maintained low end
Corporate Cash G&A ($M)FY 2025$11.2–$11.7 $10.5 Lowered
Interest Expense ($M)FY 2025$24.3 $24.1 Slightly Lower
Weighted Avg Shares/Units (M)FY 202551.4–51.6 51.3 Slightly Lower
RevPAR ($)Q4 2025—$128–$130 New
Adjusted EBITDA ($M)Q4 2025—$16.7–$18.3 New
Adjusted FFO/shr ($)Q4 2025—$0.14–$0.17 New
Hotel EBITDA Margin (%)Q4 2025—29%–31% New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1/Q2)Current Period (Q3)Trend
Silicon Valley tech demandQ1: SV RevPAR +8%, ADR $191; Q2: SV RevPAR +3%, occupancy 80% SV down 4% due to Sunnyvale account pricing decision; replacing half of declined business by October Mixed; improving by Oct
Government shutdown / policyQ1/Q2: DOGE/government travel cuts, tariff threats impacted demand in late Q1/Q2 D.C. RevPAR -6% Q3; shutdown shaved ~40 bps in Q3 and ~170 bps in Oct portfolio RevPAR Worsened in Q3
Conventions (San Diego/Austin/Dallas)Q2: San Diego +5% rebounded; Dallas weak (center closure) Q3: San Diego -10% on tough comp; Austin/Dallas centers closed, impact persists into 2026–27 Headwinds continue
Leisure strengthQ2: Leisure up 4% in comparable hotels Hampton Inn Portland $354 all-time RevPAR; Savannah +30%; Charleston +4% Strong
Capital allocation (buybacks, facility)Q1: initiated $25M buyback; Q2: announced buybacks, net debt down Upsized credit facility to $500M; ~1% shares repurchased; leverage ~21% Strengthened flexibility
Supply growth outlookQ2: limited supply; outperformance vs industry Supply <1% expected in 2026; outlook favorable; wage moderation Supportive macro

Management Commentary

  • “From a corporate perspective, we were excited to complete the refinancing and upsizing of our now $500 million credit facility, which further strengthens our balance sheet and provides significant financial flexibility... we have repurchased approximately 1 percent of outstanding shares at an average price of $6.85 per share.” — Jeff Fisher .
  • “Our third quarter saw continued strength in our leisure markets that was offset by lower corporate demand at our two Sunnyvale hotels... and cuts in government travel that occurred in advance of the official shutdown impacting the Washington, D.C. area.” — Dennis Craven .
  • “Our Q3 2025 hotel EBITDA was $28.8 million. Adjusted EBITDA was $26.2 million, and adjusted FFO was $0.32 per share... we upsized our revolving credit facility from $260 million to $300 million and upsized our term loan from $140 million-$200 million.” — Jeremy Wegner .

Q&A Highlights

  • RevPAR variance vs guide: Miss driven by Sunnyvale rate integrity decision (two hotels ~10% of rooms; down 9%) and government shutdown which reduced Aug/Sep D.C. travel; management replaced ~half of declined Sunnyvale business by October .
  • Q4 outlook deterioration: Largely due to D.C. shutdown impacts; excluding D.C., October RevPAR was down ~1% YoY; Silicon Valley Oct RevPAR flat YoY .
  • Capital deployment priorities: Rank order — continue active share repurchases under $25M plan, pursue acquisitions when yields approximate buyback, advance Portland development with careful timing to maximize returns .
  • Portland development vs cost per key: Despite stock implied price per key (~$140k) vs ~$300k build costs, project assessed on asset-specific returns expected to exceed portfolio averages; market has restrictive supply and strong ADRs (e.g., Portland ADR >$300 on weekends) .

Estimates Context

  • Q3 2025 vs consensus: Revenue $79.14M* vs actual $78.41M (miss); EPS $0.01* vs actual $0.03 (beat); EBITDA $25.75M* vs actual EBITDA $24.54M (miss) .*
  • Q4 2025 consensus: Revenue $67.14M*; EBITDA $17.70M* (company guides $66–$67M revenue and $16.7–$18.3M Adjusted EBITDA) .*
  • Coverage note: Limited EPS estimate count (1 estimate for EPS) in S&P data for Q3 2025, indicating sparse Street coverage.*
  • S&P actual revenue recorded at $78.13M* vs company-reported $78.41M (differences likely reflect data consolidation timing and classification; use company filings for definitive actuals) .*

Key Takeaways for Investors

  • Near-term: Expect choppy RevPAR through Q4 driven by D.C. shutdown and convention disruptions; focus trades on margin resilience (labor/benefit cost control) and rate integrity decisions in Sunnyvale .
  • Estimates reset: FY guide lowered/narrowed; model RevPAR contraction, lower FY revenue/EBITDA ranges, and Adjusted FFO/shr $0.96–$0.99; watch for consensus drifts post-print .
  • Capital deployment is a tangible catalyst: Buybacks (~1% done; plan equals ~<10% of market cap) plus upsized $500M facility create optionality; asset sale for $17.4M provides incremental liquidity .
  • Portfolio mix supportive: Extended-stay concentration (59% rooms; 66% EBITDA) offers defensive characteristics; leisure markets (Portland, Charleston, Savannah) continue to underpin performance .
  • Regional rotation: Watch recovery in Silicon Valley (Oct flat YoY; replacing declined corporate business) vs continued weakness in D.C., San Diego comps, and Dallas/Austin convention closures .
  • Medium-term thesis: Limited industry supply (<1%), wage moderation, favorable rate curve, and potential external growth (cap rate expansion to >8%) support margin/revitalization into 2026–27 .
  • Risk monitors: Government policy shocks, inbound international softness (Canada crossings down), and competitive convention alternatives (e.g., new Ryman property) may intermittently pressure demand .

Values marked with * are retrieved from S&P Global.