H World Group Ltd (NASDAQ:HTHT) reported first-quarter FY24 sales growth of 17.8% year-on-year to RMB5.3 billion ($731 million), beating the analyst consensus estimate of $711.50 million.

Revenue from Legacy-Huazhu segment increased 18.1% to RMB4.2 billion and that of Legacy-DH segment gained 16.6% to RMB1 billion.

The occupancy rate for all the Legacy-Huazhu hotels in operation was 77.2% versus 75.6% in first-quarter FY23, and Blended RevPAR was RMB216 versus RMB210 in first-quarter FY23.

The occupancy rate for all Legacy-DH hotels in operation was 55.8% versus 53.5% in first-quarter FY23 and Blended RevPAR was €58 compared to €55 in first-quarter FY23.

The operating income for the quarter was RMB1.003 billion or $139 million, and the operating margin was 19%.

The company held RMB5.9 billion ($818 million) in cash and equivalents as of March-end. The operating cash flow in first quarter was RMB886 million ($123 million).

As of March-end, H World’s worldwide hotel network in operation totaled 9,817 hotels and 955,657 rooms, including 9,684 hotels from Legacy-Huazhu and 133 hotels from DH.

Adjusted earnings per ADS of $0.34 beat the consensus estimate of $0.28.

“Looking ahead, the near-term RevPAR performance might see some fluctuations due to strong pent-up demand last year. However, our confidence in the long-term growth of China lodging marketplace remains unchanged,” said CEO Jin Hui.

Outlook: H World sees second-quarter revenue growth of 7% – 11%.

Price Action: HTHT shares are trading lower by 2% at $41.20 in premarket at the last check Friday.