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What: Investors were checking out of the stock of conference-focused hotel operator Gaylord Entertainment (NYS: GET) as shares fell as much as 16% in intraday trading after the company reported third-quarter results.
So what: For the third quarter, Gaylord reported a loss from continuing operations of $0.03 per share. That was against Wall Street expectations of a $0.05-per-share profit. That's bad news for investors. Maybe worse, the company also cut its full-year outlook, slightly tightening its forecast for cash flow while meaningfully ratcheting back its view on revenue per available room (revPAR) growth.
For the third quarter, the company blamed the lackluster performance on the prevalence of the hilariously acronymed SMERFs (social, military, educational, religious, and fraternal) as guests in the hotels. CEO Colin Reed noted that SMERFs typically spend less on out-of-room amenities and that crimped total revPAR for the quarter.
Now what: From here it's really a question of continued broad economic recovery for Gaylord. As Reed noted in the earnings press release, the company has started to see some of the more tight-walleted business that the company had during the recession is turning over to more profitable business. Whether that is a continuing and growing trend will depend largely on whether the U.S. economy can continue to dig its heels in and move forward.
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