Shares of Airbnb stumbled in premarket trading in New York on Thursday after the home rental company beat earnings expectations for the first quarter but provided weaker-than-expected guidance. This comes after Bank of America analysts identified other travel companies missing earnings, leaving them with new fears that a consumer travel spending downturn nears.
Here's how the company reported in the first quarter, compared with consensus expectations from Bloomberg:
Despite the revenue beat in the quarter, nights and experiences booked, a key metric in the industry, posted 9.5%, falling short of expectations of a 12% increase. "It also represents the slowest rate of growth since 2020, suggesting that overall demand has normalized after an initial post-pandemic travel boom," Bloomberg said.
Wall Street analysts were more focused on Airbnb's second-quarter guidance. The company now expects revenue for the quarter ending in June to be between $2.68 billion and $2.74 billion, down from $2.74 billion.
In a statement, Airbnb noted that the Easter holiday and currency headwinds were some factors in the travel spending slowdown - ahead of the peak travel season in July.
Wall Street analysts were focused on the "underwhelming" room nights metric and weak quarter-two guidance that overshadowed better-than-expected first-quarter earnings (list courtesy of Bloomberg):
Bloomberg Intelligence analyst Mandeep Singh
RBC Capital Markets analyst Brad Erickson (sector perform, PT $150)
Morgan Stanley analyst Brian Nowak (underweight, PT $120)
JPMorgan analyst Doug Anmuth (neutral, PT $145 from $140)
Citi analyst Ronald Josey (buy, PT to $167 from $170)
Evercore ISI analyst Mark Mahaney (in line, PT $140)
Airbnb shares are puking in premarket trading, down 9.3% to $143 handle.
The slowdown in travel spending has hit other companies in the industry.
Last week, Booking Holdings posted worse-than-expected guidance, and Expedia Group reported disappointing results.
Taking a deeper dive into markets, the Dow Jones US Travel & Leisure Index peaked in late March and fell 7.5%. The index is up against heavy resistance.
Also, during earnings calls, McDonald's, Starbucks, and Tyson Foods have recently warned about mounting headwinds hitting low-income consumers amid the failure of Bidenomics, which has left the economy plagued with elevated inflation.
To sum up, revenge travel originating from the end of the pandemic could fade here.