Sunstone Hotel Investors (SHO) Q2 2026 earnings summary

Executive summary

• Q2 2026 performance exceeded expectations, with net income rising to $26 million and RevPAR up 9.3% year-over-year, driven by strong leisure, group, and corporate demand, and the reopening of Andaz Miami Beach.

• Adjusted EBITDAre reached $77 million (+6% YoY), and Adjusted FFO per share was $0.32 (+14% YoY), both surpassing consensus estimates.

• Sale of Hyatt Regency San Francisco for $279 million at a nearly 20x trailing EBITDA multiple provided capital for discounted share repurchases and debt repayment.

• Portfolio growth was led by resorts, especially Wailea Beach Resort and Andaz Miami Beach, with urban and convention hotels also seeing strong demand.

• Severe storms in Hawaii impacted Wailea Beach Resort, resulting in repair costs and insurance recoveries.

Financial highlights

• Q2 2026 total revenues were $277.1 million (+6.7% YoY), with net income at $26 million (+141.6% YoY), and Adjusted EBITDAre at $77 million (+6% YoY).

• Adjusted FFO per diluted share reached $0.32 (+14% YoY); six-month Adjusted FFO was $109.2 million (+12.3% YoY).

• Portfolio RevPAR grew 9.3% (4.3% excluding Andaz Miami Beach); ADR was $339.71, occupancy 77.6%.

• Cash and cash equivalents post-sale were ~$430 million; total debt was $955 million.

• Share repurchases totaled $70.1 million YTD, with 4.38 million common and 1.45 million preferred shares repurchased at discounts.

Outlook and guidance

• Full-year 2026 guidance raised: net income expected at $79–$89 million, Adjusted EBITDAre at $245–$255 million, and Adjusted FFO per diluted share at $0.93–$0.98.

• RevPAR and Total RevPAR growth forecasted at 7.0%–9.0% YoY, with Andaz Miami Beach contributing 450 basis points.

• Capital expenditures for 2026 projected at $105–$115 million, mainly for Wailea Beach Resort repairs.

• Guidance reflects both the San Francisco sale and Q2 outperformance, with a cautious outlook amid macroeconomic uncertainty.

• Full-year interest expense expected at $49–$52 million; preferred dividends at $15–$16 million.