What St. Joe (JOE) Said on Its Q3 Earnings Call

Key Points

• Third-quarter results showed mixed performance: revenue fell 3% year over year and net income declined 5%, while operating income increased 16%. For the first nine months of 2026, revenue, net income and operating income rose 8%, 7% and 26%, respectively.
• Hospitality set a quarterly revenue record of $66 million, up 9%, led by 7% hotel growth and 14% club growth. Hotels reopened within 24 to 48 hours after the hurricane, with limited property damage reported.
• St. Joe is expanding residential and commercial development while returning capital to shareholders: Latitude Margaritaville Watersound’s plan expanded to roughly 7,200 homes, and the company repurchased $27.2 million of stock and raised its quarterly dividend 13% to $0.18 per share.

St. Joe NYSE: JOE reported third-quarter results that reflected organic growth despite comparisons with the prior-year period, which benefited from the sale of Watercrest, President, Chief Executive Officer and Chairman Jorge Gonzalez said during the company’s earnings call.

Total revenue declined 3% year over year and net income fell 5% in the third quarter, while operating income increased 16%. For the first nine months of 2026, total revenue rose 8%, net income increased 7% and operating income grew 26% from the comparable period of 2025, Gonzalez said.

Gonzalez said 2025 represented the company’s strongest full-year performance in two decades, excluding a large one-time timberland sale in 2014. Through the first nine months of 2026, he said the company was performing ahead of its 2025 pace.

The board on Oct. 28 declared a quarterly cash dividend of $0.18 per share, a 13% increase from the prior quarter’s dividend. Gonzalez said the payment was 157% higher than the dividend when St. Joe’s current dividend program began in 2020.

Hospitality Sets Third-Quarter Revenue Record

Hospitality was a key contributor during the quarter, with segment revenue increasing 9% to a third-quarter company record of $66 million, compared with $61 million a year earlier. Hotel revenue rose 7%, while club revenue increased 14%.

The company also continued to broaden the geographic base of its hotel guests. Gonzalez said the largest growth in hotel visitors came from New York, South Carolina, Illinois and Michigan. Through September, guests from all 50 states had stayed at the company’s hotels.

Discussing the hurricane’s effect on operations, Gonzalez said St. Joe’s properties experienced comparatively limited damage because the company was not on the storm’s harder-hit western side. The company reported downed trees at golf courses, damage to the boardwalk at Watersound Beach Club and minor roof damage at The Pearl and Camp Creek.

Hotels reopened within 24 to 48 hours, according to Gonzalez. He said the Watersound Beach Club’s principal dune system was not materially affected, and reconstruction efforts are focused on restoring the boardwalk that provides beach access.

Residential Communities and Commercial Development

At Latitude Margaritaville Watersound, 2,426 homes have been completed or exist within the community’s original 3,700-home plan. St. Joe announced a second phase during the quarter that is expected to add about 3,500 planned homes, bringing the community to roughly 7,200 planned homes.

Sales at Latitude increased 24% during the first nine months of 2026. Gonzalez said the pace of home completions can fluctuate due to the lag between a sale contract and construction completion. The backlog of homes under contract grew to 222 as of Sept. 30, from 149 at the beginning of the year.

Gonzalez attributed a decline in quarterly residential sales to the timing of scheduled closings rather than a specific operational issue. He said residential revenue arrives in “spurts” based on when individual home transactions close.

St. Joe is also developing Watersound West Bay Center, a planned commercial lifestyle town center intended to serve Latitude Margaritaville Watersound and a future PulteGroup community in the Pigeon Creek Development of Regional Impact, or DSAP. The center is planned for at least 500,000 square feet, with 33,182 square feet currently existing and 69,134 square feet under construction, including a Publix grocery store.

The PulteGroup community at Pigeon Creek is expected to begin construction in early 2027 and is planned for about 3,000 homes. Gonzalez said the company expects capital spending for growth to accelerate over the next one to two years as it responds to demand from national tenants at Watersound Town Center and West Bay Center.

He also said the company’s construction and development-related contractual obligations, which totaled $120.6 million as of Sept. 30 versus roughly $30 million a year earlier, reflect planned commercial development and infrastructure work. St. Joe has begun focusing on off-site utility corridors needed to serve future residential communities across multiple DSAPs, he said.

Capital Allocation and Marina Permitting

During the third quarter, St. Joe repurchased $27.2 million of common stock, spent $22.8 million on capital expenditures primarily for future growth, paid $9.1 million in cash dividends and repaid $8.8 million of debt. More than half of quarterly capital allocation, or 53%, went to shareholders through dividends and repurchases, Gonzalez said.

For the first nine months of 2026, the company repurchased $64.9 million of stock, up 161% from $24.9 million during the same period in 2025. St. Joe had 56.58 million shares outstanding as of Sept. 30, its lowest outstanding-share count in nearly 30 years, according to Gonzalez.

On the planned Intracoastal Waterway marina, Gonzalez said St. Joe has completed some mass grading and is prepared to proceed with development. The company has obtained most federal, state and local permits but is awaiting one final federal approval. Once it receives that permit, Gonzalez said construction activity could move forward quickly.

Chief Financial Officer Marek Bakun added that most current and expected capital expenditures are intended for growth rather than maintenance, citing the generally newer nature of the company’s properties. Gonzalez said St. Joe’s coastal-resilience approach has emphasized preserving natural dunes, vegetation and buffers around its properties rather than relying on artificial shoreline armoring.

About St. Joe (NYSE:JOE)

The St. Joe Company NYSE: JOE is a real estate development and asset management company focused primarily on Northwest Florida. The company plans, develops and manages residential, commercial and hospitality properties, with activities concentrated in the communities and coastal markets surrounding Panama City and Destin.

St. Joe's residential business includes the development of master-planned communities and residential neighborhoods, while its commercial activities include office, retail, medical and industrial properties.

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