Sunstone Hotel Investors Reports Q1 Earnings Miss, Shares Drop Over 4%

Sunstone Hotel Investors reported mixed first-quarter results, with revenues rising 7.8% year-over-year to $234.1 million but falling short of analyst expectations. The company posted adjusted funds from operations (FFO) of $0.21 per share, surpassing consensus estimates, while net income and income attributable to common stockholders declined due to higher expenses and preferred dividends. RevPAR increased modestly, with notable gains in Washington D.C., New Orleans, and San Francisco, though challenges persisted in Wailea and San Diego. The opening of the renovated Andaz Miami Beach is expected to contribute to future growth. Despite outperforming FFO estimates, Sunstone's stock has underperformed the broader market, and the company lowered its full-year revenue and FFO guidance in light of evolving market conditions. Management highlighted ongoing share repurchases and a strong balance sheet but emphasized the need to adapt to a softer demand environment.