Hilton Worldwide Holdings Inc. (NYSE: HLT) recently reported its first-quarter 2024 results. Despite facing challenges such as renovations, inclement weather, and unfavorable holiday shifts, Hilton reported a system-wide comparable RevPAR increase of 2.0 percent on a currency-neutral basis.
This modest growth underscores the company’s ability to navigate through adverse conditions. Hilton’s development pipeline also reached a record 472,300 rooms, marking a 10 percent growth from the previous year, showcasing the company’s aggressive expansion strategy.
Moreover, Hilton’s financial health remains robust, with a net income of $268 million and an adjusted EBITDA of $750 million for the quarter.
The repurchase of 3.4 million shares of Hilton common stock during the quarter, along with a total capital return of $701 million, further highlights the company’s commitment to delivering value to its shareholders. The quarter was also marked by the acquisition of a controlling interest in the Sydell Group, which owns the NoMad brand, diversifying Hilton’s portfolio.
Performance against expectations
Comparing Hilton’s first-quarter performance against expectations reveals a mixed bag of results. While the diluted EPS of $1.04 fell short of the anticipated $1.42, the adjusted EPS of $1.53 outperformed expectations.
This discrepancy can be attributed to the adjustments for special items, which underscore the volatile nature of the hospitality industry and the need for investors to consider both reported and adjusted figures. Hilton surpassed the expected $2.53 billion on the revenue front by generating $2.57 billion, indicating stronger-than-expected top-line growth. This outperformance in revenue and the adjusted EPS beating expectations suggests that Hilton is effectively managing its operational costs and capitalizing on revenue-generating opportunities.
Hilton’s Expects Net Income Between $1.5 B to $1.6 B for Full-Year 2024
Looking ahead, Hilton’s guidance for the full year 2024 is cautiously optimistic. The company projects a system-wide comparable RevPAR increase of between 2.0 percent and 4.0 percent, compared to 2023. This forecast reflects Hilton’s confidence in continuing to grow amidst a challenging economic landscape.
Furthermore, Hilton anticipates a full-year net income of between $1.5 billion and $1.6 billion, with adjusted EBITDA projected to be between $3.3 billion and $3.4 billion. The projected capital return of approximately $3.0 billion underscores Hilton’s commitment to shareholder value. However, it’s important to note that these projections do not account for the planned acquisition of the Graduate Hotels brand, which could further influence Hilton’s performance.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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