Extended Stay America (STAY) has reported 23.64 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $46.56 million, or $0.23 a share in the quarter, compared with $37.66 million, or $0.18 a share for the same period last year.     

Revenue during the quarter went down marginally by 1.66 percent to $354.52 million from $360.52 million in the previous year period. Gross margin for the quarter expanded 185 basis points over the previous year period to 57.73 percent. Total expenses were 65.77 percent of quarterly revenues, down from 67.87 percent for the same period last year. This has led to an improvement of 210 basis points in operating margin to 34.23 percent.

Operating income for the quarter was $121.34 million, compared with $115.82 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $185.73 million compared with $181.41 million in the prior year period. At the same time, adjusted EBITDA margin improved 207 basis points in the quarter to 52.39 percent from 50.32 percent in the last year period.  

Extended Stay America's chief executive officer, Gerry Lopez, commented, "We were pleased with our performance in the third quarter, as our RevPAR growth ran ahead of our closest competitive chain-scales - Economy and Midscale - as well as above the industry. We were able to show property level flow through over 90%, driving strong EBITDA growth and expanding Comparable Hotel Operating Margin by 150 basis point."

For financial year 2016, Extended Stay America forecasts revenue to be in the range of $1,261 million to $1,267 million.  It projects net income to be in the range of $153 million to $166 million.