Common-Size Income Statement
Quarterly Data
Marriott International Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
The financial trajectory from early 2015 through the first quarter of 2020 exhibits a strategic shift toward franchise-based revenue streams, followed by a significant contraction in profitability during the final period. While the company maintained a stable core of cost-reimbursed revenues, the growth in high-margin fee revenues drove margin expansion until a sharp reversal occurred in March 2020.
- Revenue Composition and Fee Trends
- A consistent upward trend in franchise fees is observed, rising from 5.81% of revenues in March 2015 to a peak of 10.03% in September 2019. This growth suggests a strategic pivot toward an asset-light model. Gross fee revenues followed a similar trajectory, increasing from approximately 13% in 2015 to peaks exceeding 18% in 2018 and 2019. However, this trend inverted in March 2020, where gross fee revenues fell to 13.44%, returning to levels seen five years prior.
- Cost Structure and Gross Profitability
- Cost of revenues remained relatively stable between 83% and 85% for much of the period but experienced a notable expansion to 88.63% by March 2020. Consequently, gross profit margins, which had improved from 14.83% in March 2015 to a high of 20.54% in June 2018, collapsed to 11.37% in the final quarter. The increase in cost of revenues is primarily driven by a rise in reimbursed expenses, which peaked at 82.82% of total revenues in March 2020.
- Operating Expense Analysis
- General and administrative expenses were largely contained, fluctuating between 3.5% and 5.0% for the majority of the timeline, though a rise to 5.77% was noted in March 2020. Merger-related costs introduced significant volatility in 2016 and 2017, with a peak impact of -5.78% of revenues in September 2016, which temporarily suppressed operating income.
- Net Income and Bottom-Line Performance
- Net income margins showed significant growth and volatility, peaking at 12.33% in June 2018. This performance was supported by an increase in net fee revenues and controlled operating costs. However, a precipitous decline is evident by March 2020, with net income falling to 0.66%. This decline is attributed to the simultaneous contraction of fee revenues and the increase in the cost of revenues, leading to an operating income margin of only 2.44%, the lowest in the analyzed period.
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