Sunstone Hotel Investors Stock Earnings Reports

Sunstone reported a stronger-than-expected Q1 driven by broad-based revenue strength, cost discipline and accretive share repurchases. Consolidated RevPAR grew 14.6% (5.7% ex-Andaz Miami Beach), total RevPAR +13.4%; adjusted EBITDAre was $68 million (+18% YoY) and adjusted FFO per diluted share was $0.27 (+~29% YoY). Resorts led performance (Wailea/Maui recovery and wine country +34% RevPAR combined); Andaz Miami Beach is ramping quickly and materially boosted results (Q1: 86% occupancy at ~$564 ADR, producing ~$6.5M EBITDA). Urban assets underperformed in Q1 due to tough comps and weather (urban RevPAR -9.3%, total RevPAR decline limited to -2.9% by out-of-room spend), but management expects sequential improvement through the year, with convention and leisure markets showing pockets of strength (San Francisco, New Orleans, Orlando, San Diego). Expenses were well controlled (rooms productivity kept departmental expense per occupied room growth to ~1%; overall comparable expense growth ~3.4% absolute or 2.4% per occupied room) and margins expanded ~140 bps in Q1; company expects low-to-mid 3% expense growth for the year. Balance sheet remains healthy with no debt maturities before 2028 and net leverage ~3.5x (4.6x incl. preferred). Capital allocation: management has repurchased common and preferred stock (~$50M year-to-date including $35M common at $9.11 and $14M preferred at a ~21% discount) and declared a $0.09 common dividend for Q2; they will continue opportunistic repurchases but did not assume further buybacks in revised guidance. Guidance was raised: rooms RevPAR for all hotels is now expected to be ~$236–$242 (full-year), total RevPAR +5.0%–7.5% (~$390–$400) including ~400 bps benefit from Andaz; adjusted EBITDAre guidance $238M–$252M and FFO per diluted share $0.88–$0.96. Capital projects are largely on schedule; Wailea sustained storm damage which will push 2026 CapEx to the upper half of prior guidance as repairs and insurance recoveries are worked through. Management reiterated focus on capital recycling (asset dispositions / acquisitions) to maximize risk-adjusted shareholder returns.