Hilton Grand Vacations Reports Second Quarter 2024 Financial Results
Intellectia.AI Updated: 1970-01-01
Hilton Grand Vacations Reports Second Quarter 2024 Financial Results
Hilton Grand Vacations Inc. (NYSE: HGV) ("HGV" or "the Company") has announced its financial results for the second quarter ended June 30, 2024.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | YoY Change | Consensus Estimates | Comparison to Consensus |
|---|---|---|---|---|---|
| Total Revenue | $1.235 billion | $1.007 billion | +22.6% | $1.31 billion | Below Expectations |
| Net Income Attributable to Stockholders | $2 million | $80 million | -97.5% | - | - |
| Adjusted Net Income | $65 million | $95 million | -31.6% | - | - |
| Diluted Earnings Per Share (EPS) | $0.02 | $0.71 | -97.18% | $0.9 | Significantly Below |
| Adjusted Diluted EPS | $0.62 | $0.85 | -27.1% | - | - |
| Adjusted EBITDA | $262 million | $248 million | +5.6% | - | - |
Interpretation : The company showed a noteworthy increase in total revenue, bolstered by growth in its segments. However, net income and diluted EPS saw significant declines year-over-year, well below Wall Street expectations. The decline was partly influenced by net deferral impacts.
Segment Performance
| Segment | Q2 2024 Revenue | Q2 2023 Revenue | YoY Change | Q2 2024 Adjusted EBITDA | Q2 2023 Adjusted EBITDA | Adjusted EBITDA Margin Q2 2024 | Adjusted EBITDA Margin Q2 2023 |
|---|---|---|---|---|---|---|---|
| Real Estate Sales & Financing | $740 million | $604 million | +22.5% | $193 million | $189 million | 26.1% | 31.3% |
| Resort Operations & Club Mgmt | $386 million | $320 million | +20.6% | $152 million | $123 million | 39.4% | 38.4% |
Interpretation : The Real Estate Sales and Financing segment saw significant revenue growth driven by increased sales and financing revenues. However, Adjusted EBITDA margin declined due to higher net deferrals. Resort Operations and Club Management also demonstrated strong revenue increase, reflecting higher average daily rates and management fees, with a slight improvement in Adjusted EBITDA margin.
Operational Data
| Metric | Value |
|---|---|
| Total Contract Sales | $757 million |
| Member Count | 720,000 |
| Net Owner Growth (NOG) | 1.7% |
| Free Cash Flow | $95 million |
| Adjusted Free Cash Flow | $370 million |
Comments from Company Officers
Mark Wang, CEO of Hilton Grand Vacations, stated, "Our results were below expectations this quarter, as we experienced some sales challenges along with a pullback in consumer spending behavior late in the quarter. While we aren't satisfied with our performance, we've identified and are addressing those challenges, and I remain confident in our business and our long-term path. Our integration remains on track, and our underlying business fundamentals are solid – with more members, more geographic diversity, and more free cash flow than we've ever had."
Share Repurchase Program
During the second quarter, the Company repurchased 2.3 million shares of common stock for $100 million. Additionally, the Board of Directors approved a new share repurchase program authorizing the repurchase of up to $500 million of its outstanding shares over a two-year period, complementing the remaining $114 million under the 2023 Share Repurchase Plan.
Forward Guidance
The company revised its guidance for full-year 2024 Adjusted EBITDA, excluding deferrals and recognitions, to a range between $1.075 billion and $1.135 billion, indicating a $125 million reduction from prior guidance.
Stock Price Movement
Following the earnings release, HGV's stock price experienced a significant decrease of approximately 9.24%.
Hilton Grand Vacations remains committed to addressing the challenges it faced during the second quarter and is optimistic about long-term growth and stability.
