Sunstone Hotel Investors (SHO) Q4 2025 earnings summary

Executive summary

• Fourth quarter operating results exceeded expectations, driven by broad-based portfolio strength, strategic capital recycling, and strong performance at Andaz Miami Beach and Wailea Beach Resort.

• Net income for Q4 2025 rose to $7.2 million from $0.8 million year-over-year, with full-year net income at $24.6 million, impacted by a hotel sale; excluding this, net income would have been $33.3 million.

• Returned over $170 million to shareholders in 2025 via dividends and share repurchases; $500 million repurchase authorization restored.

• Completed the sale of Hilton New Orleans St. Charles at a mid-6% cap rate and fully recycled proceeds into stock repurchases at a discount.

• Debuted Andaz Miami Beach, which contributed significantly to results and is showing strong momentum into 2026.

Financial highlights

• Total RevPAR grew 7.4% in Q4, or 12.5% including Andaz Miami Beach; rooms RevPAR up 9.6% with a 540 bps benefit from Andaz.

• Q4 Adjusted EBITDAre grew 17.6% to $57 million; Adjusted FFO per diluted share increased 25% to $0.20.

• Full-year margin growth of 40 basis points on 3.5% total RevPAR growth, reflecting strong cost management.

• Q4 portfolio occupancy was 69.0% (up 390 bps); ADR was $319.01 (up 3.5%).

• Excluding Andaz Miami Beach, Q4 RevPAR grew 4.2% and full-year RevPAR 2.1%.

Outlook and guidance

• 2026 rooms RevPAR expected to increase 4%-7% to $234-$241, with Andaz contributing ~400 bps at midpoint.

• Total RevPAR guidance for 2026 is 3.5%-6.5% growth, implying $385-$396.

• Adjusted EBITDAre projected at $225-$250 million; midpoint reflects 5% earnings growth over 2025, excluding one-time items.

• FFO per diluted share expected at $0.81-$0.94, with 8% growth at midpoint after adjusting for one-time items.

• Full-year interest expense projected at $53–$56 million; preferred dividends at $16–$17 million.