Shares of Choice Hotels International Inc. slipped in midday trading after the company posted a drop in third-quarter profit as surging costs outpaced an increase in revenue.
Shares of Choice Hotels traded around $116.90 by early afternoon, down 9%. The stock is on pace for its largest single-day percent decline since March of 2020.
So far this year, the stock is down 25%.
The hotel company saw its third-quarter profit fall to $103.1 million, or $1.85 a share, down from $116.7 million, or $2.08 a share, a year earlier.
Stripping out one-time items, including from asset sales, adjusted earnings came to $1.56 a share. Analysts surveyed by FactSet were looking for adjusted earnings of $1.69 a share.
Revenue rose 28%, to $414.3 million, topping Wall Street expectations of $374.9 million. However, operating costs rose 72%, to $282.6 million, squeezing profit.
Chief Financial Officer Dominic Dragisich said on a conference call with analysts that it was a noisy quarter that included some costs associated with Choice Hotels’ acquisition of Radisson Hotel Group Americas.