Choice Hotels International (CHH) shares plummeted 5.02% in pre-market trading on Thursday after the company reported first-quarter earnings that fell short of analyst expectations and provided a disappointing full-year outlook.

The hotel franchisor reported adjusted earnings per share of $1.34 for the first quarter, missing the consensus estimate of $1.37. While this represents a 4.69% increase from the same period last year, it wasn't enough to satisfy investor expectations. Revenue for the quarter came in at $332.86 million, slightly beating the analyst consensus of $331.64 million and showing a modest 0.27% year-over-year growth.

Adding to investor concerns, Choice Hotels provided a full-year adjusted diluted EPS guidance range of $6.90 to $7.22, which falls below the average analyst expectation of $7.04. This outlook suggests that the company may face challenges in meeting market expectations for the remainder of the year. Despite reporting a 2.8% growth in global net rooms system size, the lower-than-expected earnings and cautious guidance appear to have overshadowed this positive development, leading to the sharp decline in the stock price.