Hilton 1Q beats The Street; resumes capital returns

Hilton Worldwide Holdings beat The Street on earnings per share as it reported 1Q22 results on Tuesday, but missed slightly on revenue expectations.

Diluted EPS was US$0.75 for the first quarter, beating Street consensus of US$0.66. Diluted EPS, adjusted for special items, was US$0.71. The company swung to net income of US$211 million from a loss of US$108 million a year ago.

Revenue jumped 196.9% to US$1.72 billion but missed The Street consensus of US$1.75 billion.

Adjusted EBITDA was US$448 million for the first quarter versus consensus of US$433 million, which analysts at R.W. Baird said demonstrates the business model’s ability to continue generating fee-related earnings upside despite slower-than-expected RevPAR growth.

Recently opened core Hilton hotel in Nagasaki, Japan

Systemwide comparable RevPAR increased 80.5%, on a currency neutral basis, for the first quarter compared to the same period in 2021. RevPAR growth versus 2019 came in at -17% versus estimates at -13.5%.

Hilton also resumed share repurchases in March 2022 and repurchased 907,000 shares of common stock for approximately US$130 million in the first quarter and 1.8 million shares for approximately US$265 million through April.

Finally, Hilton declared a US$0.15 per share quarterly cash dividend in May 2022 and full-year 2022 capital return is projected to be between US$1.4 billion and US$1.8 billion.

“Our results in the quarter, coupled with our confidence in continued recovery throughout the year, enabled us to begin returning capital to shareholders earlier than we had anticipated,” said Hilton CEO Christopher Nassetta.

At the same time, Hilton forecast full year 2022 systemwide comparable RevPAR increase between 32% and 38% on a currency neutral basis compared to 2021. Full year net income is projected to be between just over US$1 billion, while full year adjusted EBITDA is projected to be between US$2.25 billion and US$2.35 billion. Estimates are mostly in line with analyst expectations.

Hilton approved 22,200 new rooms for development during the first quarter, bringing its pipeline to more than 410,000 rooms as of March 31, 2022. Hilton also reported that it added 13,200 rooms in 1Q, contributing to 7,800 net additional rooms, which represented 5% net unit growth.