Choice Hotels International (CHH) Q3 2026 earnings summary

Executive summary

• Priorities: accelerate U.S. net rooms growth, strengthen franchisee economics and return to a capital-efficient, asset-light model.

• Q3 revenue was $458.3M, up from $447.3M; adjusted EBITDA was $193M, up 1%, and adjusted diluted EPS rose 11% to $2.33.

• U.S. net rooms growth improved for a third consecutive quarter to flat; global net rooms grew 1.7% YoY.

• Full-year RevPAR and adjusted EBITDA outlooks increased; net income guidance was lowered.

• Global system totaled 7,604 open hotels and 660,614 rooms; pipeline was 847 hotels and 78,229 rooms.

Financial highlights

• Q3 revenue excluding reimbursable costs was $285M, up 3%; franchise and management fees rose 5% to $203.7M.

• Adjusted EBITDA was $193M, up 1%, and adjusted diluted EPS was $2.33, up 11%; excluding liquidated damages from both periods, adjusted EBITDA and revenue each grew ~5%.

• Reported net income was $57.9M versus $180.0M, and diluted EPS was $1.28 versus $3.86; prior-year results included a $100M acquisition gain, while Q3 2026 included $24.3M termination and $6M impairment charges.

• Higher U.S. royalties, franchisee program revenue and international revenue were partly offset by higher adjusted SG&A.

• Nine-month revenue was $1.240B versus $1.207B; operating income was $270.7M versus $346.9M, and interest expense was $73.8M versus $67.5M.

Outlook and guidance

• FY2026 adjusted EBITDA guidance rose to $641M–$651M, lifting the midpoint by $3.5M; adjusted diluted EPS guidance is $6.92–$7.07.

• FY2026 net income guidance is $178M–$185M and diluted EPS guidance is $3.92–$4.07; guidance was lowered for termination and impairment charges, higher reimbursable expenses, lower affiliate earnings and higher interest expense.

• U.S. and global RevPAR growth guidance is 1.5%–2.5%; global net rooms growth is expected at ~1.5%, U.S. net rooms growth near 1% by year-end, and U.S. royalty-rate expansion at ~9 bps.

• FY2026 net hotel development capital outlays are expected at ~$20M versus $103.4M in 2025; remaining development funding needs are expected to be minimal after H1 2027.

• Excluding Harvest Hosts, FY adjusted SG&A is expected to rise ~9% YoY, then moderate to low- to mid-single digits in 2027; ~90% of 2026 U.S. openings are expected to be conversions.