On August 7, 2024, Hilton Worldwide Holdings Inc (HLT, Financial) released its 8-K filing for the second quarter of 2024. The company reported a diluted EPS of $1.67 and an adjusted EPS of $1.91, surpassing the analyst estimate of $1.82. Revenue for the quarter was $2,951 million, exceeding the estimated $2,931.68 million.
Company Overview
Hilton Worldwide Holdings Inc operates nearly 1.2 million rooms across its more than 20 brands, serving segments from premium economy to luxury. Hampton and Hilton are the two largest brands, representing 28% and 19% of the company's total rooms, respectively, as of Dec. 31, 2023. Recent brand launches include Home2, Curio, Canopy, Spark, Tru, Tempo, and LivSmart, along with a partnership with Small Luxury Hotels and acquisitions of Nomad and Graduate Hotels. Managed and franchised hotels represent the vast majority of adjusted EBITDA, predominantly from the Americas regions.
Performance Highlights
Hilton Worldwide Holdings Inc reported a net income of $422 million for Q2 2024, compared to $413 million in the same period last year. Adjusted EBITDA was $917 million, up from $811 million in Q2 2023. System-wide comparable RevPAR increased by 3.5% on a currency-neutral basis, driven by growth in all segments, particularly strong group performance.
Christopher J. Nassetta, President & CEO of Hilton, stated, "We are pleased to report a solid second quarter, with an increase in RevPAR of 3.5%, driven by growth in all segments, with particularly strong group performance."
Development and Expansion
During the second quarter, Hilton approved 62,700 new rooms for development, bringing its development pipeline to a record 508,300 rooms as of June 30, 2024, representing a 15% growth from the previous year. The company added 22,400 rooms to its system, resulting in 18,000 net additional rooms for the quarter, contributing to a net unit growth of 6.2% from June 30, 2023. Hilton also completed the acquisition of the Graduate Hotels brand in May and announced that nearly 400 hotels have agreed to join its system under the strategic partnership with Small Luxury Hotels of the World.
Financial Achievements
Hilton repurchased 3.5 million shares of its common stock during the second quarter, bringing the total capital return, including dividends, to $761 million for the quarter and $1,774 million year-to-date through August. The company also amended its credit agreement, replacing $1.0 billion of outstanding term loans due June 2028 with term loans due November 2030, aligning their maturity with the outstanding $2.1 billion tranche of term loans due November 2030.
Income Statement Summary
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $2,951 million | $2,660 million |
| Net Income | $422 million | $413 million |
| Adjusted EBITDA | $917 million | $811 million |
| Diluted EPS | $1.67 | $1.55 |
| Adjusted EPS | $1.91 | $1.63 |
Balance Sheet and Liquidity
As of June 30, 2024, Hilton had $10.3 billion of debt outstanding with a weighted average interest rate of 4.81%. The company had $802 million in cash and cash equivalents, including $71 million of restricted cash. Hilton's revolving credit facility had an available borrowing capacity of $1,913 million after considering $87 million of outstanding letters of credit.
Outlook
For the full year 2024, Hilton projects system-wide RevPAR to increase between 2.0% and 3.0% on a comparable and currency-neutral basis compared to 2023. Net income is projected to be between $1,532 million and $1,555 million, with adjusted EBITDA expected to be between $3,375 million and $3,405 million. The company also anticipates a capital return of approximately $3.0 billion for the year.
For more detailed information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from Hilton Worldwide Holdings Inc for further details.
