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Summit Hotel Properties Reports Second Quarter 2025 Results

Summit Hotel Properties, Inc. (NYSE: INN) recently shared its financial performance for the second quarter of 2025, detailing both challenges and strategic successes. The company reported a net loss attributable to common stockholders of $1.6 million, or $0.02 per diluted share, a stark contrast to the net income of $30.8 million recorded during the same period in 2024.

Financial Highlights

Despite the difficult operating backdrop, the company managed to execute several key strategic priorities. Notably, the Revenue per Available Room (RevPAR) index increased nearly 150 basis points to 115%, demonstrating an effective management of operating expenses, which only rose by 1.5% during the first half of the year. However, in the same-store portfolio, RevPAR saw a decline of 3.6% compared to last year, primarily due to challenging comparisons with a previous year that benefitted from robust demand driven by special events.

President and CEO Jonathan P. Stanner remarked, "Despite the hurdles, we continuously focus on our strategic objectives. Our hotel portfolio remains in excellent condition, positioning us well for long-term growth."

In terms of liquidity, the organization has strengthened its financial standing through completion of two significant debt financings, substantially extending maturity dates and enhancing liquidity. Currently, Summit maintains over $310 million in corporate liquidity with no debt maturities until 2028.

Details of Financial Performance

Q2 Results

• - Total Revenues: $192.9 million, compared to $193.9 million in Q2 2024.
• - Net loss per diluted share: $0.02, contrasting with a gain of $0.23 in the prior year.
• - Pro forma Adjusted Funds from Operations (AFFO) decreased to $32.7 million, approximately $0.27 per diluted share, down from $36.4 million or $0.29 per diluted share a year earlier.

Year-to-Date Results

Summit's performance mirrored these struggles when also viewed cumulatively over the first half of 2025:

• - Net Loss: $6.3 million, or $0.06 per diluted share, against a net income of $28.7 million from the same duration in 2024.
• - Total Revenues: $377.4 million year-to-date, slightly off from $382.0 million the previous year.
• - Pro forma RevPAR fell by 1.5% to $126.90, while the adjusted EBITDA saw a decline to $95.9 million, down from $104.7 million.

Share Repurchase Program and Dividends

In its ongoing efforts to share value with investors, Summit repurchased 3.6 million shares for a total of $15.4 million during Q2, averaging $4.30 per share. The company also declared a quarterly cash dividend of $0.08 per share, yielding an annualized dividend of 6.3%, based on recent closing prices. This approach underscores the company's commitment to return value to stockholders despite ongoing operational adjustments.

Expansion and Future Outlook

During this quarter, Summit concluded the expansion of Onera Fredericksburg, boosting its total lodging units and enhancing overall guest experience. Looking ahead, while the management expresses confidence in the long-term fundamentals of their portfolio, they anticipate near-term challenges due to macroeconomic volatility and consumer price sensitivity, leading to a slight adjustment in their outlook for Adjusted FFO for the year.

The company's quarterly earnings conference call scheduled for August 6, 2025, will provide further insights into the current state and future direction of the business, along with detailed discussions on financial strategies and upcoming projects.

As Summit Hotel Properties continues to navigate a fluctuating economic landscape, it remains focused on optimizing its operational efficiency and enhancing guest experiences through strategic location management and financial prudence.