CHH earnings analysis
What we found in CHH's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Choice Hotels reported total revenues of $340.6 million for Q1 2026, slightly exceeding estimates, but earnings per share (EPS) of $0.44 fell short of the expected $1.32. The decrease in operational performance was primarily attributed to a decline in operating income and increased interest expenses, despite a significant increase in international franchise agreements and royalty fees. Looking forward, the company maintains projections for adjusted diluted EPS between $6.92 to $7.14 for FY 2026.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue Exceeds Estimates
- Q1 2026 revenue was reported at $340.6 million, surpassing estimates of $333.9 million.
- Major Drop in EPS
- Reported diluted EPS was $0.44, significantly below the estimated EPS of $1.32.
- Increase in International Franchise Agreements
- Franchise agreements awarded grew by 72% compared to last year.
- Growth in International Royalty Fees
- International royalty fees increased by $5.2 million to $11.8 million.
- Higher Interest Expenses
- Interest expense increased to $23.96 million from $21.24 million year-over-year.
- Strong Franchise Growth
- Total franchised hotels reached 7,588, with a pipeline of 830 hotels under construction.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Decline in Operating Income
- Operating income decreased to $60.03 million, down from $79.93 million the previous year.
- Increased Reimbursable Deficit
- The reimbursable deficit increased by $17.5 million from the year prior, impacting net income.
- High Effective Tax Rate
- Effective tax rate increased to 33.0%, up from 25.5%, affecting net profitability.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.44
- Segment
- Franchise and management fees: $149.6 million
- Segment
- Partnership services and fees: $24.7 million
- Segment
- Owned hotels: $30.4 million
- Segment
- Other: $11.9 million
What they said about what is next.
Maintains FY 2026 diluted EPS guidance between $5.72 to $5.94.
The filing reads worse than the one before it.
What came before.
- 10-K · February 19, 2026
- Choice Hotels positions itself as a fee‑for‑service hotel franchisor with scale (7,575 hotels, 656,825 rooms open) and a development pipeline (825 hotels, 77,862 rooms). FY2025 revenue was roughly flat vs. FY2024 while…
- 10-Q · August 6, 2025
- Choice Hotels International's Q2 2025 performance demonstrated a decline in total revenues and margins compared to prior year figures, attributed to mixed segment performance and significant interest expenses. However,…
- 10-K · February 20, 2025
- Choice reiterates a fee-for-service franchising strategy backed by a large system (7,586 open hotels / 653,810 rooms) and a meaningful development pipeline (964 hotels / 97,325 rooms). The 10‑K emphasizes profitable…
- 10-Q · May 8, 2024
- Choice Hotels reported nearly flat revenue of $331.95M for the quarter ended March 31, 2024 versus $332.79M a year ago, but operating income and EPS declined materially as interest expense rose. Operating cash flow…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
Read the next one first.
We read every filing CHH makes the day it lands, and put it next to what the options market did about it. Members get both, and an alert when a filing arrives.
Cancel anytime · Month to month · Switch tiers whenever