Hilton Worldwide Q2 Earnings Smashes Estimates, Shares Gain

Hilton Worldwide Q2 Earnings Smashes Estimates, Shares Gain
  • Hilton Worldwide Holdings Inc HLT reported second-quarter FY22 sales growth of 68.5% year-on-year, to $2.24 billion, beating the consensus of $2.08 billion.
  • Franchise and licensing fees revenue rose 47.7% Y/Y, and the Owned and leased hotels revenue jumped 133%.
  • The occupancy rate for the quarter was 74.3% in the U.S., 72% in Europe, and 60.7% in Middle East & Africa. In total, the System-wide occupancy rate was 70.8%.
  • On a currency-neutral basis, System-wide comparable RevPAR increased 54.3% Y/Y but decreased 2.1% versus the same period in 2019.
  • In Q2, Hilton opened 91 new hotels contributing to 14,400 additional rooms.
  • Total expenses for the quarter rose 48.6%. The operating margin was 26.6%, and operating income for the quarter increased 167% to $598 million.
  • Adjusted EBITDA of $679 million increased 69.7% Y/Y. Adjusted EBITDA margin expanded 30 basis points to 69.1%.
  • Adjusted EPS of $1.29 beat the analyst consensus of $1.04.
  • The company expects an FY22 capital return of $1.5 billion - $1.9 billion.
  • Outlook: Hilton expects FY22 adjusted EPS of $4.21 - $4.46 (prior view $3.77 - $4.02) versus the Street view of $4.09.
  • HLT sees Q3 adjusted EPS of $1.16 - $1.24, against the consensus of $1.16.
  • It expects System-wide comparable RevPAR to increase 37% - 43% (prior view 32% - 38%) for FY22 and 25% - 30% for Q3.
  • Price Action: HLT shares are trading higher by 7.47% at $129.20 in premarket on the last check Wednesday.

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