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Hilton Worldwide Holdings Inc. (HLT - Free Report) reported solid second-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate and rising year over year. Earnings beat the consensus estimate for the seventh straight quarter. Revenues, on the other hand, surpassed for the ninth consecutive time.
Q2 in Detail
Hilton reported adjusted earnings per share (EPS) of $1.63, outpacing the Zacks Consensus Estimate of $1.57. In the prior-year quarter, the company reported an adjusted EPS of $1.29.
Quarterly revenues of $2,660 million surpassed the Zacks Consensus Estimate of $2,541 million and increased 18.8% from the year-ago quarter’s levels. During the quarter, franchise and licensing fees increased 13.4% year over year. Owned and leased hotels, base and other management fees and incentive management fees rose 13.4%, 12% and 50% year over year, respectively.
Hilton Worldwide Holdings Inc. Price, Consensus and EPS Surprise
In the quarter under review, system-wide comparable revenue per available room (RevPAR) grew 12.1% year over year (on a currency-neutral basis) owing to an increase in occupancy and average daily rate. Also, RevPAR was up 9.3% from 2019 levels. Our model predicted system-wide RevPAR to rise 10.3% year over year.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the second quarter were $811 million, up 19.4% year over year. Our estimate for adjusted EBITDA was $784 million, up 15.5% year over year.
Balance Sheet
As of Jun 30, 2023, cash and cash equivalent balance (including restricted cash) amounted to $883 million compared with $978 million reported in the previous quarter. HLT had long-term debt outstanding of $8.8 billion (sequentially flat), excluding deferred financing costs and discounts, with a weighted average interest rate of approximately 4.54%.
During the quarter, Hilton repurchased 3.3 million shares of its common stock worth approximately $470 million.
Management declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on (or before) Sep 29, to shareholders of record as of Aug 25, 2023.
Business Updates
During second-quarter 2023, Hilton opened 92 new hotels. It also achieved net unit growth of nearly 11,200 rooms.
As of Jun 30, 2023, Hilton's development pipeline comprised nearly 3,060 hotels, with nearly 440,900 rooms across 116 countries and territories including 30 countries and territories where it currently has no running hotels.
Outlook
For third-quarter 2023, the company anticipates net income in the range of $395-$409 million. Adjusted EBITDA is expected to be between $790 million and $810 million. It projects third-quarter EPS (adjusted for special items) to be between $1.60 and $1.65.
For third-quarter 2023, management anticipates system-wide RevPAR to increase in the 4-6% band on a year-over-year basis.
For 2023, HLT estimates net income in the range of $1,387-$1,422 million. Earlier, it anticipated net income in the $1,331-$1,385 million band.
Adjusted EBITDA is expected to be between $2,975 million and $3,025 million. Previously adjusted EBITDA was suggested to lie between $2,875 million and $2,950 million. HLT continues to expect general and administrative expenses for 2023 in the range of $390-$410 million.
The company expects 2023 EPS (adjusted for special items) in the range of $5.93-$6.06 compared with the previous projection of $5.68-$5.88. Full-year capital return is anticipated to be between $2.4 billion and $2.6 billion, up from the previous expectation of $1.8-$2.2 billion.
The company anticipates 2023 system-wide RevPAR to increase between 10% and 12% year over year compared with the previous projection of 8% and 11%.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggests rises of 101.6% and 531%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2 (Buy). OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have soared 67.5% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates increases of 33.9% and 89.3%, respectively, from the year-ago period’s levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 206.8% in the past year.
The Zacks Consensus Estimate for Royal Caribbean Cruises’ 2023 sales and EPS implies gains of 48.8% and 163.1%, respectively, from the year-ago period’s levels.
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Hilton (HLT) Beats on Q2 Earnings & Revenues, Raises '23 View
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported solid second-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate and rising year over year. Earnings beat the consensus estimate for the seventh straight quarter. Revenues, on the other hand, surpassed for the ninth consecutive time.
Q2 in Detail
Hilton reported adjusted earnings per share (EPS) of $1.63, outpacing the Zacks Consensus Estimate of $1.57. In the prior-year quarter, the company reported an adjusted EPS of $1.29.
Quarterly revenues of $2,660 million surpassed the Zacks Consensus Estimate of $2,541 million and increased 18.8% from the year-ago quarter’s levels. During the quarter, franchise and licensing fees increased 13.4% year over year. Owned and leased hotels, base and other management fees and incentive management fees rose 13.4%, 12% and 50% year over year, respectively.
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 revenue per available room (RevPAR) grew 12.1% year over year (on a currency-neutral basis) owing to an increase in occupancy and average daily rate. Also, RevPAR was up 9.3% from 2019 levels. Our model predicted system-wide RevPAR to rise 10.3% year over year.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the second quarter were $811 million, up 19.4% year over year. Our estimate for adjusted EBITDA was $784 million, up 15.5% year over year.
Balance Sheet
As of Jun 30, 2023, cash and cash equivalent balance (including restricted cash) amounted to $883 million compared with $978 million reported in the previous quarter. HLT had long-term debt outstanding of $8.8 billion (sequentially flat), excluding deferred financing costs and discounts, with a weighted average interest rate of approximately 4.54%.
During the quarter, Hilton repurchased 3.3 million shares of its common stock worth approximately $470 million.
Management declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on (or before) Sep 29, to shareholders of record as of Aug 25, 2023.
Business Updates
During second-quarter 2023, Hilton opened 92 new hotels. It also achieved net unit growth of nearly 11,200 rooms.
As of Jun 30, 2023, Hilton's development pipeline comprised nearly 3,060 hotels, with nearly 440,900 rooms across 116 countries and territories including 30 countries and territories where it currently has no running hotels.
Outlook
For third-quarter 2023, the company anticipates net income in the range of $395-$409 million. Adjusted EBITDA is expected to be between $790 million and $810 million. It projects third-quarter EPS (adjusted for special items) to be between $1.60 and $1.65.
For third-quarter 2023, management anticipates system-wide RevPAR to increase in the 4-6% band on a year-over-year basis.
For 2023, HLT estimates net income in the range of $1,387-$1,422 million. Earlier, it anticipated net income in the $1,331-$1,385 million band.
Adjusted EBITDA is expected to be between $2,975 million and $3,025 million. Previously adjusted EBITDA was suggested to lie between $2,875 million and $2,950 million. HLT continues to expect general and administrative expenses for 2023 in the range of $390-$410 million.
The company expects 2023 EPS (adjusted for special items) in the range of $5.93-$6.06 compared with the previous projection of $5.68-$5.88. Full-year capital return is anticipated to be between $2.4 billion and $2.6 billion, up from the previous expectation of $1.8-$2.2 billion.
The company anticipates 2023 system-wide RevPAR to increase between 10% and 12% year over year compared with the previous projection of 8% and 11%.
Zacks Rank
Hilton currently has a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 44.5% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggests rises of 101.6% and 531%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2 (Buy). OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have soared 67.5% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates increases of 33.9% and 89.3%, respectively, from the year-ago period’s levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 206.8% in the past year.
The Zacks Consensus Estimate for Royal Caribbean Cruises’ 2023 sales and EPS implies gains of 48.8% and 163.1%, respectively, from the year-ago period’s levels.