Wyndham Destinations, Inc. (NYSE:WYND) Q3 2018 Earnings Conference Call - Final Transcript
Nov 01, 2018 • 08:30 am ET
Good morning. And welcome to the Wyndham Destinations' Third Quarter 2018 Earnings Conference Call. After the speakers' remarks, there will be a question-and-answer period. (Operator Instructions) As a reminder, ladies and gentlemen, this conference is being recorded. If you do not agree with these terms, please disconnect at this time.
Thank you. I would now like to turn the call over to Chris Agnew. Please go ahead, sir.
Thank you, Tony, and good morning.
(Forward-Looking Cautionary Statements)
This morning, Michael Brown, our President and Chief Executive Officer, will provide an overview on our strategic initiatives, and our third quarter results. And Mike Hug, our Chief Financial Officer, will then provide greater detail on our third quarter results and discuss our outlook. Following these remarks, we will be available to respond to your questions.
With that, I'm pleased to turn the call over to Michael.
Thank you, Chris. Good morning. And thank you for joining us for our third quarter earnings call and our first full quarter as Wyndham Destinations. Before I discuss the strength of our day-to-day business, I want to share that our transition into Wyndham Destinations has gone extremely well. Our number one priority in separating Wyndham Destinations and Wyndham Hotels and Resorts was to ensure that our core business will continue to operate and perform without skipping a beat. With that as a measure the transition has been a success.
Our leadership team was in place before separation. Our transition of operations from Wyndham Worldwide to Wyndham Destinations has been seamless and the alignment around our core mission to put the world on vacation has never been stronger.
In fact, in August, we brought our senior leaders from around the globe to Orlando to share the vision and strategy of Wyndham Destinations for the upcoming years. The summit was an important milestone and one that gave me great confidence that our organization is aligned and more focused than ever on our vision and on delivering results.
That brings me to our performance in the third quarter, we had a very strong quarter, delivering on our key operating metrics. Solid execution by our leaders allowed us to deliver further adjusted EBITDA and further adjusted EPS at the high end of our guidance range in the third quarter.
Further adjusted EBITDA in the quarter was $271 million, 5% higher than prior year. The $271 million of further adjusted EBITDA includes a $10 million negative impact from Hurricane Florence. We were able to more than offset the impact of the hurricane in the quarter with two items. The first is operating over performance of $7 million, and second, timing favorability of $5 million.
Gross Vacation Ownership sales grew 7% over the third quarter of 2017, led by 5% increase in Tours. Top-line growth flowed to the bottom-line as we continue to manage cost in a very disciplined manner. This resulted in further adjusted EBITDA margins improving 20 basis points year-over-year to 25.5%.
Diluted earnings per share was $1.47 on a further