A month has gone by since the last earnings report for Hilton Worldwide Holdings Inc. (HLT). Shares have added about 3.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hilton Worldwide due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Hilton Q2 Earnings Meet Estimates, Revenues Increase Y/Y
Hilton reported second-quarter 2026 results, wherein earnings met the Zacks Consensus Estimate, while revenues missed the same. The top and bottom lines increased on a year-over-year basis.
Hilton delivered solid operating performance during the quarter, driven by improving travel demand, higher system-wide RevPAR and continued expansion of its managed and franchised hotel network. Higher franchise and licensing fees supported results, while declines in ownership revenues and incentive management fees partly offset the gains. Management expects demand momentum to continue through the remainder of 2026 and into 2027.
Hilton’s Q2 Results in Detail
Hilton reported adjusted earnings per share of $2.29, in line with the Zacks Consensus Estimate. In the year-ago quarter, it reported adjusted earnings of $2.20 per share. The metric increased 4.1% year over year.
Total revenues of $3.34 billion missed the consensus mark of $3.36 billion by 0.6%. Nonetheless, revenues increased 6.5% year over year from $3.14 billion.
The quarter’s franchise and licensing fees improved 8.5% year over year to $808 million from $745 million. Our estimate for the metric was $837.7 million.
Base and other management fees increased 2.1% to $99 million from $97 million. Our estimate for the metric was $113.4 million.
Incentive management fees declined 8% year over year to $69 million. Ownership revenues fell 6.3% to $311 million, while other revenues decreased 6.5% to $72 million. Cost reimbursement revenues increased 9.4% year over year to $1.98 billion from $1.81 billion.
HLT’s Q2 RevPAR & Adjusted EBITDA
In the second quarter, system-wide comparable RevPAR increased 3.9% year over year on a currency-neutral basis, driven by increases in both occupancy and average daily rate. Our model projected system-wide RevPAR growth of 2.1%.
Occupancy improved 1 percentage point year over year to 74.9%. Average daily rate increased 2.5% year over year to $166.97.
RevPAR in the United States increased 5.4% year over year. The metric rose 4.6% in the Americas, excluding the United States, and 4.3% in Europe. Asia-Pacific RevPAR increased 1.2%.
However, RevPAR in the Middle East and Africa declined 29.5% year over year, owing to a 16.1-percentage-point decrease in occupancy and an 8.1% decline in average daily rate.
Adjusted EBITDA were $1.05 billion, up 4.6% year over year. Adjusted EBITDA margin expanded 140 basis points year over year to 76.6%.
Net income in the second quarter increased 9% year over year to $482 million. Operating income advanced 10.3% year over year to $858 million.
HLT’s Q2 Balance Sheet
As of June 30, 2026, Hilton’s total cash and cash equivalents, including restricted cash, were $1.06 billion compared with $970 million as of Dec. 31, 2025.
As of the second quarter, the company had $13.44 billion of debt outstanding, excluding unamortized deferred financing costs and discounts, compared with $12.46 billion at 2025-end. The weighted average interest rate was 5.03%.
In May 2026, Hilton issued $1 billion aggregate principal amount of 5.5% senior notes due 2031. It used a portion of the proceeds to repay $450 million of borrowings under its revolving credit facility.
During the quarter, the company repurchased 2.9 million shares for $932 million. Total capital returns, including dividends, were $966 million during the quarter and $2.03 billion year to date through July.
Hilton’s Business Updates
In the second quarter of 2026, Hilton opened 207 hotels comprising 24,100 rooms, resulting in 21,600 net room additions. Room openings increased 50% sequentially from the first quarter of 2026.
The company achieved net unit growth of 6.1% from June 30, 2025. Hilton also approved 42,900 rooms for development during the quarter, with approvals increasing 50% sequentially.
As of June 30, 2026, Hilton’s development pipeline comprised 3,853 hotels representing 541,300 rooms across 132 countries and territories. The pipeline increased 6% year over year and reached a record level.
During the quarter, Hilton launched Undergraduate by Hilton, an upper-midscale lifestyle brand targeting college and university markets. Notable openings included Conrad Athens The Ilisian and the first three Apartment Collection by Hilton properties.
HLT’s Q3 & 2026 Outlook
For third-quarter 2026, Hilton anticipates net income between $502 million and $516 million. Adjusted EBITDA is expected to be between $1.04 billion and $1.06 billion. It predicts adjusted earnings per share between $2.28 and $2.34.
For the third quarter of 2026, management forecasts system-wide comparable RevPAR growth of approximately 4% year over year on a currency-neutral basis.
For 2026, Hilton estimates net income between $1.88 billion and $1.91 billion. Adjusted EBITDA is expected to be between $4.04 billion and $4.08 billion. It predicts adjusted earnings per share between $8.89 and $9.01.
Management anticipates full-year system-wide comparable RevPAR growth of 3-3.5% year over year. Net unit growth is expected between 6% and 7%, while capital returns are projected to be approximately $3.5 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Hilton Worldwide has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock has a score of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Hilton Worldwide has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).