In a second quarter earnings call Aug. 1, Anywhere Real Estate reported $30 million in profits for the quarter, reversing a downward trend over the last few quarters to post an $11 million increase from the same period last year. Revenue remained relatively flat YoY, with $1.669 billion reported, a slight decline over last year’s 1.671 billion.
The company reported a closed transaction-volume increase of 3% YoY, the second consecutive quarter of transaction-volume increases, with units down about 5% and prices up 8%. Q2 operating EBITA (Earnings Before Interest, Taxes and Amortization) reported is $139 million, a $13 million improvement year-over-year, the second quarter results data showed.
Anywhere credited its luxury sales in part for the volume increase.
“Our strength in luxury continued as our Corcoran and Sotheby’s International Realty brands meaningfully outperformed the market, including having positive year-over-year unit growth,” a release stated.
Anywhere is the parent company of Better Homes and Gardens® Real Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®, Corcoran®, ERA® and Sotheby’s International Realty®.
After being the first company to settle the class-action lawsuits nearly a year ago, Anywhere received final court approval for its $83.5 million nationwide settlement in the sell-side antitrust class action cases in May. The firm paid $10 million on the settlement in the fourth quarter of 2023 and $20 million in the second quarter of 2024. The remaining $53.5 million will be due when appeals are resolved, a release noted, adding the company does not believe that will happen this year. Company President and CEO Ryan Schneider said back in April that being the first to settle would give them a leg up in agents preparing for the changes to Cooperative Compensation coming later this month.
“Anywhere leveraged our distinct advantages to deliver strong results in the quarter, accelerating our transformation and building our future financial octane,” said Schneider in an Aug. 1 release. “Our strategic strengths and profitability set Anywhere apart, along with our great affiliated agents, franchisees and employees who continue to deliver great value to consumers.”
Schneider also said the company realized cost savings of approximately $30 million this quarter and expects full-year cost savings to reach $120 million, an increase of $20 million.
Anywhere CFO added that the company’s second-quarter results demonstrates its “continued resiliency” against current market headwinds.
“The Anywhere second quarter financials demonstrate our continued resiliency with volume growth, strong profitability and solid free cash flow generation,” said Charlotte Simonelli, Anywhere executive vice president, chief financial officer and treasurer. “We believe our unique strengths and continued holistic financial discipline drive differentiated performance versus our competition and will enable Anywhere to emerge even stronger when the housing market improves.”
More second quarter 2024 highlights and estimates:
- Commission splits in the second quarter were up 40 basis points year-over-year to 80.5%, continuing the seven-quarter trend of more stable splits.
- Free Cash Flow of $63 million versus $105 million for the corresponding quarter last year. Free Cash Flow was $83 million in the second quarter excluding the $20 million paid for a portion of the sell-side antitrust litigation settlement.
- Schneider said the company is “well-positioned for success” with resources and support for affiliated agents and franchisees as it approaches upcoming industry practice changes on Aug. 17.
- Anywhere expects an increase in cost savings by $20 million to $120 million by year end.
- The company expects its Free Cash Flow excluding one-time items to be approximately $100 million in 2024. The one-time items are now estimated to be approximately $60 million, and consist of a $20 million payment toward its antitrust litigation settlement and approximately $40 million for a 1999 Cendant legacy tax matter. The firm previously estimated one-time items at over $100 million for 2024.
- The approximately $40 million 1999 Cendant legacy tax matter will be due once statutory notice is received, which the company has assumed will occur in 2024.
During a Q&A session following prepared remarks Thursday, Schneider commented on the company’s efforts to prepare and support agents at the brokerage level for the upcoming NAR settlement changes about to be implemented later this month, including a promise to provide multiple “flexible and simple” buyer agreements.
“Our duty to supervise our agents is critical, and we take it very seriously,” Schneider said. “We’re here to support our agents on everything, whether it’s on data security or fair housing or anything else, and this is just another area where we’ll be good stewards of our responsibility.
“We’re pumped about our rollout,” he added. “We think we’re in a great spot…we think we are a little farther out on others on this. We’ve already got training being rolled out, and we have our (agents) in a better position than a lot of others—and we can potentially do some recruiting based on Anywhere’s leadership here.”
To read the full release, click here.
