Key Highlights

  • Third-quarter 2026 Bottom Line for CHH: $57.9 million in net income, equal to $1.28 a diluted share, down from $180.0 million ($3.86 a share) a year before.
  • Excluding the termination item, adjusted diluted EPS climbed close to 11%, reaching $2.33, while adjusted EBITDA came to roughly $193 million, a 1% increase.
  • Occupancy gains of 160 basis points lifted U.S. RevPAR by 3.8%.
  • For 2026, the adjusted EBITDA view now stands at $641 million to $651 million, while adjusted EPS is projected in a $6.92 to $7.07 range.
  • Liquidity totaled $928 million while net Leverage registered 3.2 times.

Option Termination Charge of $24.3 Million and a Large Prior-Year Gain Weigh on Net Income

Choice Hotels International (NYSE:CHH) published results on Nov 2, 2026 for the period ended Sep 30, 2026. Net Earnings were $57.9 million, which is $1.28 per diluted share, against $3.86 per share ($180.0 million) a year earlier. The prior-year figure benefited from a $100.0 million gain when the company acquired the remaining interest in its Canadian joint venture.

Operating profit slid to $106.5 million, against $142.4 million a year before, and total Revenue reached $458.3 million, up from $447.3 million. Ending an option on a European lease-based hospitality operator cost $24.3 million, a one-off charge, and two owned hotels were written down by $6.0 million. Franchise and management fees rose by $9.9 million, landing at $203.7 million.

Underlying Earnings Rise 11% to $2.33, With U.S. RevPAR Ahead 3.8%

Excluding the termination expense, adjusted diluted EPS increased about 11% to $2.33 on higher fees and buybacks. Adjusted EBITDA reached roughly $193 million, a 1% gain, and revenue excluding reimbursable items advanced 3% to $285 million. Stripping out smaller liquidated damages, both measures rose 5%.

Across 7,604 hotels, the system holds 660,614 rooms. Measured in the U.S., RevPAR advanced 3.8%, from a 160 basis point occupancy gain and a 1.0% rise in average daily rate. FIFA's World Cup contributed around 40 basis points.

U.S. Royalty rates averaged 5.23%, up from 5.15%. Net rooms globally increased 1.7%, while the U.S. figure was flat, marking a third straight quarter of progress. In October, U.S. RevPAR was up around 7%, according to management.

EBITDA Outlook Lifted, EPS Band Tightened, and Overhead Spending Accelerates

Choice now sees 2026 adjusted EBITDA at $641 million to $651 million, a midpoint that moved up $3.5 million. For EPS, the company narrowed the band to $6.92 through $7.07 and anticipates RevPAR growth between 1.5% and 2.5% both in the U.S. and worldwide.

Excluding Harvest Hosts, adjusted SG&A is now forecast to increase 9% this year, a step up from the earlier mid-single-digit expectation, driven by strategic programs, AI tools and larger receivable reserves.

Nine-month operating cash generation stood at $121.9 million, down from $184.8 million, owing to the termination outlay and costlier franchise agreement acquisitions.

Harvest Hosts Purchase, Two Hotel Sales and a Year-End Room Growth Goal

Harvest Hosts was bought on Oct 1, 2026 for roughly $130 million, paid with cash and revolver borrowings. Its subscription model posted close to $33 million of revenue and roughly $11 million of adjusted EBITDA in the 12 months before that. After quarter-end, two owned hotels went for an estimated $34 million net, with franchise agreements retained.

Through September, $211 million went back to shareholders, $172 million of it via buybacks. Capital spending on hotel development should be near $20 million this year, down from $103 million in 2025, and roughly $200 million of repurchases is planned for 2026. Next points to monitor: U.S. net rooms growth near 1% by year-end and the 2027 guidance due in February.