Sunstone Hotel Investors (SHO) Announces Earnings Results For Third Quarter 2025

Sunstone Hotel Investors, Inc. (SHO) today announced its financial results for the most recent quarter, revealing a revenue of $229.3 million, which surpassed analysts’ expectations by approximately $5.2 million. The company reported earnings per share that met estimates, reflecting a steady performance in a competitive market. With these results, Sunstone continues to demonstrate its resilience and adaptability in the hospitality sector.

Key Highlights:

• Net income for Q3 2025 was $1.3 million, down from $3.2 million in Q3 2024.
• Total Portfolio RevPAR increased by 2.0% to $216.12, with an average daily rate of $307.43 and occupancy at 70.3%.
• Adjusted EBITDA_re_ decreased by 6.6% to $50.1 million.
• Adjusted FFO per diluted share decreased by 5.6% to $0.17.
• Successful recasting of credit facilities, addressing all debt maturities through 2028 and lowering borrowing costs.
• Management maintains its 2025 outlook despite mixed macroeconomic conditions.

In the third quarter of 2025, Sunstone Hotel Investors reported a net income of $1.3 million, a significant decrease from the previous year. The company experienced a 2.0% increase in Total Portfolio RevPAR, attributed to stronger performance in San Francisco, which helped mitigate weaker demand in other markets. CEO Bryan A. Giglia noted, “Our portfolio delivered earnings that were in-line with our expectations despite ongoing headwinds in several of our larger markets.” The company successfully amended its credit facilities, enhancing financial flexibility and addressing debt maturities through 2028.

Looking ahead, Sunstone is maintaining its 2025 guidance, which reflects known impacts from a government shutdown but acknowledges potential risks from ongoing economic uncertainties. Giglia emphasized the company’s commitment to addressing its valuation discount and delivering shareholder value, stating, “The Board and management team will continue to explore all avenues to realize the value of our exceptional portfolio.” The company plans to invest approximately $80 million to $100 million into its portfolio, focusing on renovations and improvements across several properties.

Sunstone Hotel Investors, Inc. (SHO) has experienced a notable price fluctuation, with a recent uptick of 3.23% over the past week, suggesting a potential rebound in investor sentiment. However, the stock’s performance over the past year has been less favorable, reflecting a decline of 10.77%, which raises questions about the company’s long-term growth prospects. The price-to-earnings ratio stands at a lofty 52.67, indicating that investors are paying a premium for earnings that have been shrinking, as evidenced by a two-year compound annual growth rate (CAGR) of -11.53% in earnings per share. On a more positive note, the company has managed to achieve a robust free cash flow CAGR of 23.23%, which could provide a cushion for future investments or dividends. Despite this, the revenue growth has also been negative at -3.69%, highlighting challenges in generating top-line growth. With a return on invested capital of just 2.64% and a net profit margin of 2.05%, the fundamentals suggest that while there may be short-term price movements, the underlying financial health of Sunstone Hotel Investors remains a concern for long-term investors. As the market continues to react to these metrics, stakeholders will be keenly watching how the company navigates its operational challenges moving forward.

Sunstone Hotel Investors, Inc. is a lodging real estate investment trust (REIT) that as of the date of this release has interests in 19 hotels comprised of 9,997 rooms. Sunstone’s business is to acquire, own, asset manage and renovate or reposition hotels considered to be Long-Term Relevant Real Estate®, the majority of which are operated under nationally recognized brands, such as Marriott, Hilton and Hyatt.