Title

Earning Preview: RLJ Lodging this quarter’s revenue is expected to decrease by 1.60%, and institutional views are Neutral

Abstract

RLJ Lodging will report quarterly results on February 26, 2026 Post Market, with expectations pointing to modest year-over-year revenue and profit softness as investors weigh operating momentum against cost pressures and portfolio actions.

Market Forecast

Current estimates indicate RLJ Lodging’s quarterly revenue of 319.60 million US dollars, down 1.60% year over year, with estimated EPS at -0.044 (down 4.76% year over year) and estimated EBIT at 22.93 million US dollars (down 5.78% year over year). Forecast data for gross profit margin and net profit margin are not disclosed; the prior quarter’s margins provide the reference frame as the market gauges potential for stabilization or pressure. The main business remains rooms, which anchors near-term performance and sets the cadence for property-level profitability and operating leverage. The rooms segment appears the most promising operational lever given its scale at 267.37 million US dollars last quarter; segment-level year-over-year detail is not disclosed, but rate discipline and occupancy mix will likely define the trajectory.

Last Quarter Review

RLJ Lodging reported last quarter revenue of 330.05 million US dollars, a gross profit margin of 24.14%, GAAP net profit attributable to the parent company of -3.74 million US dollars (net profit margin -1.13%), and adjusted EPS of -0.07; revenue declined 4.54% year over year and adjusted EPS fell 177.78% year over year. Net profit weakened quarter on quarter by 113.13%, underscoring the sensitivity of bottom-line results to modest revenue changes and operating costs in the period. Main business highlights: rooms generated 267.37 million US dollars (81.01% of revenue), food and beverage produced 36.88 million US dollars (11.18% of revenue), and other business contributed 25.79 million US dollars (7.82% of revenue); total revenue declined 4.54% year over year.

Current Quarter Outlook

Rooms Segment Outlook

Rooms revenue is the largest driver of RLJ Lodging’s quarterly performance, and it will again set the tone for the reported figures and the market’s reaction. Given the forecast for total revenue to decline 1.60% year over year, investors will look closely at occupancy and average daily rate patterns and how day-of-week and market mix affect RevPAR. Pricing discipline is likely to remain a priority, balancing rate integrity against seasonal demand, while targeted promotional activity could support occupancy without diluting rate where compression allows. Portfolio initiatives such as room renovations or repositioning can temporarily constrain available inventory, yet they often support pricing in subsequent periods; the cadence of these projects can influence quarter-specific results. Operational execution at higher-volume urban assets versus more suburban or secondary markets may also create dispersion within the portfolio, which can subtly pull consolidated results up or down depending on localized demand trends and events calendars. Overall, the rooms segment’s scale means small changes in occupancy or rate can materially affect consolidated EBIT and EPS, and that is reflected in the forecasted softness versus last year.

Food and Beverage and Other Revenue Outlook

Food and beverage revenue is tightly linked to group and banquet activity, and its contribution of 36.88 million US dollars last quarter shows it is a meaningful, though secondary, driver of earnings quality. As the quarter progresses, banquet calendars, corporate events, and conference pacing influence both F&B and spillover rooms performance; stronger event execution can lift incremental revenue and improve operating leverage by utilizing fixed back-of-house capacity. Menu pricing, portion control, and procurement optimization are key cost levers, and effective labor scheduling is critical to protect margins when volumes fluctuate. Other revenue streams at 25.79 million US dollars provide additional diversification across parking, ancillary services, and fees, and while individually smaller, these lines can bolster resilience when room demand is uneven. The absence of segment-level forecast data suggests a focus on tactical execution rather than headline growth, with operational efficiency likely to drive incremental margin gains even if top-line segment growth is muted.

Stock Price Drivers This Quarter

The market will anchor on whether reported revenue and EPS come in line with current estimates of 319.60 million US dollars and -0.044, respectively, and whether EBIT at 22.93 million US dollars proves more resilient than forecast. Given last quarter’s net margin of -1.13% and a net profit that weakened quarter on quarter by 113.13%, investors will test whether cost management, rate discipline, and property-level efficiencies can stabilize margins despite the modest revenue decline. Commentary about portfolio actions—such as asset sales, targeted reinvestment, or redevelopment timelines—can affect forward expectations for RevPAR, margin trajectory, and capital allocation flexibility, even if immediate financial impacts are minor. Interest expense and the effective cost of capital remain relevant to earnings conversion, so any updates on debt maturities, refinancing, or hedging can alter the outlook for EPS and cash generation. Finally, the interplay between corporate and leisure demand, and the pacing of group business, will shape the sustainability of performance beyond the quarter and influence how the market extrapolates current trends into the following periods.

Analyst Opinions

The dominant tone among available views is neutral, with Compass Point maintaining a Hold rating on RLJ Lodging and setting a price target of 7.50 US dollars. This stance implies a wait-and-see orientation pending clearer evidence of sustained revenue stability and improved margin conversion, consistent with estimated year-over-year declines in revenue (-1.60%), EBIT (-5.78%), and EPS (-4.76%). The Hold view suggests analysts are watching the balance between rate discipline and occupancy, as well as how cost control and operational initiatives translate into EBIT resilience despite top-line softness. Neutral opinions often hinge on visibility—analysts seek confirmation that RevPAR trends can hold through seasonality and that the rooms segment’s scale can convert into higher margins without sacrificing rate integrity. Commentary also tends to emphasize capital allocation choices and the timing of portfolio moves, where well-executed recycling and targeted reinvestment can catalyze sentiment even if near-term reported metrics show modest declines. In sum, the prevailing institutional view is cautious, waiting for evidence in the February 26, 2026 print and guidance that the company can stabilize revenue and lift margins, which would help re-rate expectations for the remainder of the year.