8% for inventory tank after misbooking

Airbnb (ABNB) shares fell Wednesday as the company expects lower bookings and average daily rates this quarter compared to last year.

Airbnb CFO David Stevenson said at the company’s earnings call, “Considering last year’s Omicron, the second quarter was a little tougher, but we’re seeing overall stable demand in the second half of the year. I can see you,” he said. Stevenson’s comments came after the company posted better-than-expected first-quarter results.

Airbnb shares fell as much as 14% in early Wednesday trading, the biggest one-day drop since 2020, according to Bloomberg data.

Here are some notable numbers from the company’s earnings report, compared to Wall Street estimates compiled by Bloomberg:

Earnings: $1.8 billion actual vs. estimated $1.79 billion

EPS: 18 cents actually, 12 cents estimated

Booked Nights and Experiences: 121.1 million actual vs. 122.4 million estimated

Second Quarter Earnings Guidance: Actual $2.35-2.45 billion vs. estimated $2.42 billion

Airbnb also announced a new $2.5 billion share buyback.

Airbnb CEO Brian Chesky noted on the conference call that the company’s most price-sensitive customers are in North America, particularly the United States.

“The cheapest properties have the highest occupancy rates,” Mr. Chesky said in an earnings call. “Yes, people want low-priced properties, and as Airbnb rates continue to normalize, our rates won’t rise as fast as hotel rates will continue to rise in the next few years. We look forward to increasing occupancy of even more properties on Airbnb.”

Wall Street analysts lowered their price targets in response to Airbnb’s weaker-than-expected 2023 outlook. Jefferies equity analyst John Colantuoni, who has a Buy rating on the stock, lowered his price target to $140 from $155. Colantuoni said the main concern for Airbnb’s stock is slowing growth at Nights and Experiences and efforts to cut prices to rekindle demand.

“We will closely monitor demand fluctuations,” Mr. Colantuoni said in a memo to clients.

A woman speaks on the phone at the Airbnb office headquarters in the SOMA area of ​​San Francisco, California, USA on August 2, 2016.Reuters/Gabriel Lurie

A woman speaks on the phone at the Airbnb office headquarters in the SOMA area of ​​San Francisco, California, USA on August 2, 2016.Reuters/Gabriel Lurie

“The number of nights and experiences booked in Q1 2023 increased 19% compared to a year ago. We are hitting record highs, demonstrating both the loyalty of our returning customers and the expansion of our first-time booking base,” the company wrote in a letter to shareholders. He added that “the current nighttime backlog is about 25% higher than it was a year ago.”

Looking ahead, Airbnb aims to increase its supply of hosts.

“Airbnb travel has become mainstream,” the letter said. “We want hosting to be just as popular. To achieve this, we are raising awareness about hosting, making it easier to get started, and providing even better tools for hosts. doing.”

The company is also gearing up for the critical summer travel season as online travel demand has fully taken off after the pandemic. Airbnb said it spent a lot of money on marketing this summer.

“In 2023, we brought forward the timing of our marketing spending and put more emphasis on the first half of the year compared to 2022,” the company said in a letter to shareholders. “In addition, we are increasing our investment in brand marketing in more countries around the world. We believe spending earlier in the year will help support the peak summer travel season. believe.”

Ally Garfinkle Senior Tech Reporter at Yahoo Finance. follow her on her twitter @agarfinks and further LinkedIn.

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