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Hilton's (HLT) Q2 Earnings Surpass Estimates, Revenues Lag
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Hilton Worldwide Holdings Inc. (HLT - Free Report) reported second-quarter 2024 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Both the metrics increased year over year. The company's performance was backed by notable improvements in revenue per available room (RevPAR), attributed to higher occupancy rates and average daily rates (ADR). The company benefited from growth in all segments.
Following the results, the hospitality company’s shares decreased 1% in the pre-market trading session on Aug 7.
Q2 in Detail
Hilton reported adjusted earnings per share (EPS) of $1.91, beating the Zacks Consensus Estimate of $1.85. The reported value rose 17.2% from the year-ago quarter’s reported adjusted EPS of $1.63.
Quarterly total revenues of $2,951 million missed the consensus mark of $2,973 million. The top line increased 10.9% year over year.
In the quarter, franchise and licensing fees improved 11.5% to $689 million year over year. Our estimate for the metric was $701.8 million.
Base and other management fees rose 8.1% to $93 million, while incentive management fees were down 1.4% to $68 million year over year. Our model predicted management and incentive management fees to be at $128.4 million and $84.8 million, respectively.
Owned and leased hotels’ revenues moved down 1.2% year over year to $337 million compared with the year-ago quarter’s level. Our estimate for the metric was $402.6 million.
Hilton Worldwide Holdings Inc. Price, Consensus and EPS Surprise
In the quarter under review, system-wide comparable RevPAR grew 3.5% year over year (on a currency-neutral basis), owing to an increase in occupancy and ADR. Our model predicted the metric to rise 2.6% year over year in the quarter under review.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were $917 million, up 13.1% year over year. Our estimated adjusted EBITDA was $896.1 million.
Balance Sheet
As of Jun 30, 2024, cash and cash equivalent was $731 million, down from $800 million reported in the prior quarter. As of the second quarter of 2024, Hilton reported long-term debt outstanding of $10.2 billion, down from $10.3 billion reported in the previous quarter, excluding deferred financing costs and discounts, with a weighted average interest rate of 4.81%.
In the quarter, Hilton repurchased 3.5 million shares of its common stock worth approximately $724 million.
Management declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on Sep 27 to shareholders of record as of Aug 23, 2024.
Business Updates
In second-quarter 2024, Hilton opened 165 new hotels. It achieved net room growth of 18,000 rooms.
In this quarter, HLT made significant strides in expanding its lifestyle portfolio. The company acquired the Graduate brand, adding 32 new hotels to its system and four more to its development pipeline. Hilton also welcomed its inaugural NoMad hotel, NoMad London, which has earned a spot on the "World's 50 Best Hotels" list. Additionally, the company launched three impressive Portuguese properties: the DUO Hotel Lisbon under the Curio Collection by Hilton, the DoubleTree by Hilton Lagoa Azores and the Legacy Hotel Cascais, also part of the Curio Collection by Hilton.
As of Jun 30, 2024, Hilton's development pipeline comprised nearly 3,370 hotels, with almost 508,300 rooms across 136 countries and territories — including 39 countries and regions where it currently has no running hotels. For 2024, the company expects net unit growth in the range of 7-7.5%.
Q3 & 2024 Outlook
For third-quarter 2024, Hilton anticipates net income in the range of $435-$448 million. Adjusted EBITDA is expected to be between $875 million and $890 million. It projects third-quarter EPS (adjusted for special items) to be between $1.80 and $1.85.
For third-quarter 2024, management forecasts system-wide RevPAR (on a currency-neutral basis) to increase in the 2-3% band on a year-over-year basis.
For 2024, the company estimates net income in the range of $1.53-$1.55 billion compared with the previous estimate of $1.58-$1.62 billion. Adjusted EBITDA is expected to be between $3.37 billion and $3.40 billion compared with the prior expectation of $3.37 billion and $3.42 billion. It suggests general and administrative expenses for 2024 in the range of $415-$430 million.
Hilton expects 2024 EPS (adjusted for special items) in the range of $6.93-$7.03 compared with the previous expectation of $6.89-$7.03. Full-year capital return is anticipated to be $3 billion.
Management anticipates 2024 system-wide RevPAR (on a currency-neutral basis) to increase 2-3% year over year, down from the prior estimate of 2-4% growth.
Carnival Corporation & plc (CCL - Free Report) reported impressive second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily backed by sustained demand strength and increased booking volumes. The management expects net yields to exceed 10% and drive double-digit returns on invested capital.
The quarter’s passenger ticket revenues amounted to $3.8 billion, up from $3.1 billion reported in the prior-year quarter. CCL reported strong booking momentum for 2025, with record volumes surpassing 2024 levels in price and occupancy. It reported strength in pricing for the North America, Australia and Europe segments for the third and the fourth quarter of 2024 on a year-over-year basis. The company’s efforts to extend the booking curve and leverage favorable pricing trends resulted in record cumulative bookings for the remainder of 2024, with occupancy rates above 2023 levels.
Mattel, Inc. (MAT - Free Report) reported mixed second-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top line missed the consensus estimate for the third straight quarter.
The company experienced robust bottom-line performance, propelled mainly by significant gross margin expansion and growth in adjusted EBITDA. MAT is well positioned for the second half with new product innovation and increased retail support. For 2024, management continues to expect net sales to be comparable with the prior year’s levels at cc. It also anticipates 2024 adjusted EPS to be between $1.35 and $1.45 compared with $1.23 in 2023.
American Outdoor Brands, Inc. (AOUT - Free Report) reported mixed fourth-quarter fiscal 2024 (ended Apr 30, 2024) results. It reported breakeven earnings, which missed the Zacks Consensus Estimate, while net sales topped the same. The top line rose year over year but the bottom line declined.
The quarterly results reflected growth in its outdoor lifestyle and shooting sports categories on the back of new product launches across its several brands. The footprint expansion in Canada also bodes well for the company, allowing it to offer outdoor brands to the consumers of Canada. The bottom line was negatively impacted by the amortization of tariff and freight costs, higher promotional product discounts and an immaterial adjustment to a tariff drawback claim submitted in the fiscal 2022.
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Hilton's (HLT) Q2 Earnings Surpass Estimates, Revenues Lag
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported second-quarter 2024 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
Both the metrics increased year over year. The company's performance was backed by notable improvements in revenue per available room (RevPAR), attributed to higher occupancy rates and average daily rates (ADR). The company benefited from growth in all segments.
Following the results, the hospitality company’s shares decreased 1% in the pre-market trading session on Aug 7.
Q2 in Detail
Hilton reported adjusted earnings per share (EPS) of $1.91, beating the Zacks Consensus Estimate of $1.85. The reported value rose 17.2% from the year-ago quarter’s reported adjusted EPS of $1.63.
Quarterly total revenues of $2,951 million missed the consensus mark of $2,973 million. The top line increased 10.9% year over year.
In the quarter, franchise and licensing fees improved 11.5% to $689 million year over year. Our estimate for the metric was $701.8 million.
Base and other management fees rose 8.1% to $93 million, while incentive management fees were down 1.4% to $68 million year over year. Our model predicted management and incentive management fees to be at $128.4 million and $84.8 million, respectively.
Owned and leased hotels’ revenues moved down 1.2% year over year to $337 million compared with the year-ago quarter’s level. Our estimate for the metric was $402.6 million.
Hilton Worldwide Holdings Inc. Price, Consensus and EPS Surprise
Hilton Worldwide Holdings Inc. price-consensus-eps-surprise-chart | Hilton Worldwide Holdings Inc. Quote
RevPAR and Adjusted EBITDA
In the quarter under review, system-wide comparable RevPAR grew 3.5% year over year (on a currency-neutral basis), owing to an increase in occupancy and ADR. Our model predicted the metric to rise 2.6% year over year in the quarter under review.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were $917 million, up 13.1% year over year. Our estimated adjusted EBITDA was $896.1 million.
Balance Sheet
As of Jun 30, 2024, cash and cash equivalent was $731 million, down from $800 million reported in the prior quarter. As of the second quarter of 2024, Hilton reported long-term debt outstanding of $10.2 billion, down from $10.3 billion reported in the previous quarter, excluding deferred financing costs and discounts, with a weighted average interest rate of 4.81%.
In the quarter, Hilton repurchased 3.5 million shares of its common stock worth approximately $724 million.
Management declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on Sep 27 to shareholders of record as of Aug 23, 2024.
Business Updates
In second-quarter 2024, Hilton opened 165 new hotels. It achieved net room growth of 18,000 rooms.
In this quarter, HLT made significant strides in expanding its lifestyle portfolio. The company acquired the Graduate brand, adding 32 new hotels to its system and four more to its development pipeline. Hilton also welcomed its inaugural NoMad hotel, NoMad London, which has earned a spot on the "World's 50 Best Hotels" list. Additionally, the company launched three impressive Portuguese properties: the DUO Hotel Lisbon under the Curio Collection by Hilton, the DoubleTree by Hilton Lagoa Azores and the Legacy Hotel Cascais, also part of the Curio Collection by Hilton.
As of Jun 30, 2024, Hilton's development pipeline comprised nearly 3,370 hotels, with almost 508,300 rooms across 136 countries and territories — including 39 countries and regions where it currently has no running hotels. For 2024, the company expects net unit growth in the range of 7-7.5%.
Q3 & 2024 Outlook
For third-quarter 2024, Hilton anticipates net income in the range of $435-$448 million. Adjusted EBITDA is expected to be between $875 million and $890 million. It projects third-quarter EPS (adjusted for special items) to be between $1.80 and $1.85.
For third-quarter 2024, management forecasts system-wide RevPAR (on a currency-neutral basis) to increase in the 2-3% band on a year-over-year basis.
For 2024, the company estimates net income in the range of $1.53-$1.55 billion compared with the previous estimate of $1.58-$1.62 billion. Adjusted EBITDA is expected to be between $3.37 billion and $3.40 billion compared with the prior expectation of $3.37 billion and $3.42 billion. It suggests general and administrative expenses for 2024 in the range of $415-$430 million.
Hilton expects 2024 EPS (adjusted for special items) in the range of $6.93-$7.03 compared with the previous expectation of $6.89-$7.03. Full-year capital return is anticipated to be $3 billion.
Management anticipates 2024 system-wide RevPAR (on a currency-neutral basis) to increase 2-3% year over year, down from the prior estimate of 2-4% growth.
Hilton currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Consumer Discretionary Releases
Carnival Corporation & plc (CCL - Free Report) reported impressive second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily backed by sustained demand strength and increased booking volumes. The management expects net yields to exceed 10% and drive double-digit returns on invested capital.
The quarter’s passenger ticket revenues amounted to $3.8 billion, up from $3.1 billion reported in the prior-year quarter. CCL reported strong booking momentum for 2025, with record volumes surpassing 2024 levels in price and occupancy. It reported strength in pricing for the North America, Australia and Europe segments for the third and the fourth quarter of 2024 on a year-over-year basis. The company’s efforts to extend the booking curve and leverage favorable pricing trends resulted in record cumulative bookings for the remainder of 2024, with occupancy rates above 2023 levels.
Mattel, Inc. (MAT - Free Report) reported mixed second-quarter 2024 results, with earnings surpassing the Zacks Consensus Estimate and revenues missing the same. The top line missed the consensus estimate for the third straight quarter.
The company experienced robust bottom-line performance, propelled mainly by significant gross margin expansion and growth in adjusted EBITDA. MAT is well positioned for the second half with new product innovation and increased retail support. For 2024, management continues to expect net sales to be comparable with the prior year’s levels at cc. It also anticipates 2024 adjusted EPS to be between $1.35 and $1.45 compared with $1.23 in 2023.
American Outdoor Brands, Inc. (AOUT - Free Report) reported mixed fourth-quarter fiscal 2024 (ended Apr 30, 2024) results. It reported breakeven earnings, which missed the Zacks Consensus Estimate, while net sales topped the same. The top line rose year over year but the bottom line declined.
The quarterly results reflected growth in its outdoor lifestyle and shooting sports categories on the back of new product launches across its several brands. The footprint expansion in Canada also bodes well for the company, allowing it to offer outdoor brands to the consumers of Canada. The bottom line was negatively impacted by the amortization of tariff and freight costs, higher promotional product discounts and an immaterial adjustment to a tariff drawback claim submitted in the fiscal 2022.