(Yahoo!Finance) - Inflation continues to stay hot in the U.S. and the stock market got walloped on Tuesday, but Expedia CEO Peter Kern is simply not seeing a consumer recession just yet.
"We see the same economic news that everybody else sees," Kern told Yahoo Finance Live at the Goldman Sachs Communacopia + Technology Conference on Tuesday. "And you know, we wonder about Europe in the winter, and all the things that people are talking about. But it certainly doesn't feel like there's a consumer recession happening right now."
To that end, Expedia is a few weeks removed from a second quarter that suggests a solid holiday travel season — barring a fresh leg down in the U.S. economy.
The travel giant, which is undergoing a turnaround by way of Kern's leadership and focus on profitable growth, saw second quarter lodging bookings reach the highest in its history. Sales and adjusted operating profits were the highest for any second quarter.
Sales rose 51% from a year ago. Gross bookings advanced 26% year over year. The company ended the quarter with $5.6 billion in cash and eyes toward further paying down debt.
"We believe Expedia is expanding its international footprint through its portfolio of strong brands with significant scale, including Brand Expedia, Hotels.com, and Vrbo, among many others," JP Morgan analyst Doug Anmuth stated. "EXPE’s increasing discipline and rationalization could serve to catalyze broader operational improvements & drive margin expansion. We welcome the changes at EXPE, and we think a simpler and more disciplined EXPE should emerge stronger on the other side of COVID-19."
Kern told Yahoo Finance that Expedia is in smack in the middle of its transformation, and investors should see stronger results in coming quarters.
"I'd say we're in the middle [of the turnaround]," Kern said. "We've done a lot of the hard work, but the hard work has yet to sort of show the benefits. I think that's coming fairly soon, we have been building up this membership base of tourism — app usage is way up. Vrbo was the number one app on iOS during most of the COVID experience and number one on iPhone and Android right now. So we're getting more adoption there. All of these are important steps in our journey, and they all build on each other."
By Brian Sozzi · Anchor, Editor-at-Large
