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Hilton (HLT) Q3 Earnings In Line, Revenues Beat Estimates
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Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2023 results, wherein earnings came in line with the Zacks Consensus Estimate but revenues surpassed the same. Revenues beat the consensus estimate for the tenth straight quarter. Both metrics increased on a year-over-year basis.
Q3 in Detail
Hilton reported adjusted earnings per share (EPS) of $1.67, which met the Zacks Consensus Estimate. In the prior-year quarter, the company reported adjusted EPS of $1.31.
Quarterly revenues of $2,673 million outpaced the Zacks Consensus Estimate of $2,606 million and increased 12.9% from the year-ago quarter’s levels. During the quarter, franchise and licensing fees improved 12.2% year over year. Owned and leased hotels, base and other management fees, and incentive management fees rose 13.6%, 6.6% and 21.2% 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 6.8% year over year (on a currency-neutral basis) owing to an increase in occupancy and average daily rate. Also, RevPAR was up 11.4% from 2019 levels. Our model predicted system-wide RevPAR to extend 4.5% year over year.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the third quarter was $834 million, up 13.9% year over year. Our estimated adjusted EBITDA to jump 9.4% year over year to $801 million.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalent balance (including restricted cash) came in at $779 million compared with $883 million reported in the previous quarter. HLT reported long-term debt outstanding of $8.8 billion (sequentially flat), excluding deferred financing costs and discounts, with a weighted average interest rate of approximately 4.57%.
During the quarter, Hilton repurchased 4.5 million shares of its common stock worth approximately $684 million.
Management declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on (or before) Dec 29, to shareholders of record as of Nov 17, 2023.
Business Updates
During third-quarter 2023, Hilton opened 107 new hotels. It also achieved net unit growth of nearly 15,700 rooms.
As of Sep 30, 2023, Hilton's development pipeline comprised nearly 3,190 hotels, with almost 457,300 rooms across 119 countries and territories, including 29 countries and territories where it currently has no running hotels.
Outlook
For fourth-quarter 2023, HLT anticipates net income in the range of $374-$388 million. Adjusted EBITDA is expected to be between $739 million and $759 million. It projects third-quarter EPS (adjusted for special items) to be between $1.51 and $1.56.
For fourth-quarter 2023, management forecasts system-wide RevPAR to increase in the 4.5-5.5% band on a year-over-year basis.
For 2023, HLT estimates net income in the range of $1,375-$1,389 million. Earlier, the metric was anticipated in the $1,387-$1,422 million band.
Adjusted EBITDA is expected to be between $3,025 million and $3,045 million. Previously, it was suggested to be between $2,975 million and $3,025 million. HLT continues to suggest 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 $6.04-$6.09 compared with the previous projection of $5.93-$6.06. Full-year capital return is anticipated to be between $2.4 billion and $2.6 billion, up from the prior expectation of $1.8-$2.2 billion.
Management anticipates 2023 system-wide RevPAR to increase 12-12.5% year over year compared with the earlier anticipation of 10-12%.
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have declined 3.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates rises of 21.6% and 59.4%, respectively, from the year-ago levels.
YETI Holdings, Inc. (YETI - Free Report) flaunts a Zacks Rank #1. YETI has a trailing four-quarter earnings surprise of 11.3% on average. The stock has gained 35% in the past year.
The Zacks Consensus Estimate for YETI’s 2024 sales and EPS implies improvements of 9.9% and 18.5%, respectively, from the prior-year levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have increased by 10.1% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS suggests jumps of 44.5% and 117.9%, respectively, from the year-earlier levels.
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Hilton (HLT) Q3 Earnings In Line, Revenues Beat Estimates
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2023 results, wherein earnings came in line with the Zacks Consensus Estimate but revenues surpassed the same. Revenues beat the consensus estimate for the tenth straight quarter. Both metrics increased on a year-over-year basis.
Q3 in Detail
Hilton reported adjusted earnings per share (EPS) of $1.67, which met the Zacks Consensus Estimate. In the prior-year quarter, the company reported adjusted EPS of $1.31.
Quarterly revenues of $2,673 million outpaced the Zacks Consensus Estimate of $2,606 million and increased 12.9% from the year-ago quarter’s levels. During the quarter, franchise and licensing fees improved 12.2% year over year. Owned and leased hotels, base and other management fees, and incentive management fees rose 13.6%, 6.6% and 21.2% 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 6.8% year over year (on a currency-neutral basis) owing to an increase in occupancy and average daily rate. Also, RevPAR was up 11.4% from 2019 levels. Our model predicted system-wide RevPAR to extend 4.5% year over year.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the third quarter was $834 million, up 13.9% year over year. Our estimated adjusted EBITDA to jump 9.4% year over year to $801 million.
Balance Sheet
As of Sep 30, 2023, cash and cash equivalent balance (including restricted cash) came in at $779 million compared with $883 million reported in the previous quarter. HLT reported long-term debt outstanding of $8.8 billion (sequentially flat), excluding deferred financing costs and discounts, with a weighted average interest rate of approximately 4.57%.
During the quarter, Hilton repurchased 4.5 million shares of its common stock worth approximately $684 million.
Management declared a quarterly cash dividend of 15 cents per share. The dividend will be payable on (or before) Dec 29, to shareholders of record as of Nov 17, 2023.
Business Updates
During third-quarter 2023, Hilton opened 107 new hotels. It also achieved net unit growth of nearly 15,700 rooms.
As of Sep 30, 2023, Hilton's development pipeline comprised nearly 3,190 hotels, with almost 457,300 rooms across 119 countries and territories, including 29 countries and territories where it currently has no running hotels.
Outlook
For fourth-quarter 2023, HLT anticipates net income in the range of $374-$388 million. Adjusted EBITDA is expected to be between $739 million and $759 million. It projects third-quarter EPS (adjusted for special items) to be between $1.51 and $1.56.
For fourth-quarter 2023, management forecasts system-wide RevPAR to increase in the 4.5-5.5% band on a year-over-year basis.
For 2023, HLT estimates net income in the range of $1,375-$1,389 million. Earlier, the metric was anticipated in the $1,387-$1,422 million band.
Adjusted EBITDA is expected to be between $3,025 million and $3,045 million. Previously, it was suggested to be between $2,975 million and $3,025 million. HLT continues to suggest 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 $6.04-$6.09 compared with the previous projection of $5.93-$6.06. Full-year capital return is anticipated to be between $2.4 billion and $2.6 billion, up from the prior expectation of $1.8-$2.2 billion.
Management anticipates 2023 system-wide RevPAR to increase 12-12.5% year over year compared with the earlier anticipation of 10-12%.
Zacks Rank
Hilton currently has a Zacks Rank #2 (Buy).
Other Key Picks
Some other top-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Live Nation Entertainment, Inc. (LYV - Free Report) sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 34.6%, on average. Shares of LYV have declined 3.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for LYV’s 2023 sales and EPS indicates rises of 21.6% and 59.4%, respectively, from the year-ago levels.
YETI Holdings, Inc. (YETI - Free Report) flaunts a Zacks Rank #1. YETI has a trailing four-quarter earnings surprise of 11.3% on average. The stock has gained 35% in the past year.
The Zacks Consensus Estimate for YETI’s 2024 sales and EPS implies improvements of 9.9% and 18.5%, respectively, from the prior-year levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2. OSW has a trailing four-quarter earnings surprise of 42.6% on average. Shares of OSW have increased by 10.1% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS suggests jumps of 44.5% and 117.9%, respectively, from the year-earlier levels.