Q2 2024 Hilton Grand Vacations Inc Earnings Call Transcript
Key Points
- Hilton Grand Vacations Inc (HGV) reported contract sales of $757 million and adjusted EBITDA of $270 million, demonstrating strong financial performance despite challenges.
- The company has successfully integrated Bluegreen into its operations, achieving $71 million in annualized cost synergies, on track for a $100 million target.
- HGV's financing team effectively managed the higher rate environment, meeting strong ABS investor demand with well-subscribed note offerings.
- The company produced $370 million in adjusted free cash flow, maintaining a strong cash flow conversion rate and repurchasing 2.3 million shares for $100 million.
- HGV continues to expand its product offerings and geographic diversity, enhancing its market position and member base, with over 720,000 owners and a 1.7% net owner growth rate.
- HGV experienced a broad-based pullback in consumer spending behavior, particularly affecting new buyer segments, leading to a reduction in guidance for the year.
- The company faced execution challenges during the quarter, partly due to the integration process with Bluegreen, which disrupted sales and marketing operations.
- There was a year-over-year decline in both tours and VPG, with new buyer tours remaining lower as the company rebuilds its tour pipeline.
- The provision for bad debt increased to over 15% of owned contract sales, reflecting higher losses from some Bluegreen-originated loans.
- HGV's restructuring efforts caused significant disruption, impacting staffing levels and limiting tour slot availability, which affected sales performance.
Good morning, and welcome to the Hilton Grand Vacations second quarter 2024 earnings conference call. A telephone replay will be available for seven days following the call. The dial-in number is 8445122921 and enter PIN number 13743187. At this time, all participants have been placed in a listen-only-mode, and the floor will be open for your questions following the presentation. (Operator Instructions)
Please limit yourself to one question and one follow-up to allow the opportunity for everyone to ask questions, you may then re-enter the queue to ask additional questions. I would now like to turn the call over to Mark Melnyk, Senior Vice President of Investor Relations. Please go ahead, sir.
Thank you, operator, and welcome to the Hilton Grand Vacations second quarter 2024 earnings call. As a reminder, our discussions this morning will include forward-looking statements. Actual results could differ materially from those indicated by these forward-looking statements,
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