Hilton Worldwide Holdings Inc. HLT reported third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate, while revenues missed the same. Both the top and bottom lines increased on a year-over-year basis.
Hilton delivered strong operating performance during the quarter, driven by higher system-wide RevPAR, improving occupancy and average daily rates. Growth in management and franchise fees supported results, while lower ownership revenues partly offset the gains. Management expects operating momentum to continue through the remainder of 2026 and into 2027.
Hilton’s Q3 Results in Detail
Hilton reported adjusted earnings per share of $2.45, surpassing the Zacks Consensus Estimate of $2.36 by 3.8%. In the year-ago quarter, it reported adjusted earnings of $2.11 per share. The metric increased 16.1% year over year.
Total revenues of $3.33 billion missed the consensus mark of $3.39 billion by 1.8%. Nonetheless, revenues increased 6.6% year over year from $3.12 billion.
Hilton Worldwide Holdings Inc. Price, Consensus and EPS Surprise
Hilton Worldwide Holdings Inc. price-consensus-eps-surprise-chart | Hilton Worldwide Holdings Inc. Quote
The quarter's franchise and licensing fees improved 10.3% year over year to $815 million from $739 million. Our estimate for the metric was $828.6 million.
Base and other management fees increased 3.2% to $96 million from $93 million. Our estimate for the metric was $100.5 million.
Incentive management fees increased 9.2% year over year to $71 million from $65 million. Ownership revenues declined 5.6% to $304 million, while other revenues increased 12.5% to $72 million. Cost reimbursement revenues increased 7.1% year over year to $1.97 billion from $1.84 billion.
HLT's Q3 RevPAR & Adjusted EBITDA
In the third quarter, system-wide comparable RevPAR increased 5.8% year over year on a currency-neutral basis, driven by increases in both occupancy and average daily rate.
Occupancy improved 1.4 percentage points year over year to 75.8%. Average daily rate increased 3.9% year over year to $164.57.
RevPAR in the United States increased 7% year over year. The metric rose 6.3% in the Americas, excluding the United States, and 6.5% in Europe.
However, RevPAR in the Middle East and Africa declined 5.6% year over year, owing to a 5-percentage-point decrease in occupancy despite a 1.7% increase in average daily rate. Asia-Pacific RevPAR declined 0.5%.
Adjusted EBITDA was $1.06 billion, up 8.4% year over year. Adjusted EBITDA margin expanded 180 basis points year over year to 77%.
Net income in the third quarter increased 27.3% year over year to $536 million. Operating income advanced 17% year over year to $909 million.
Hilton's Q3 Balance Sheet
As of Sept. 30, 2026, Hilton's total cash and cash equivalents, including restricted cash, were $830 million compared with $970 million as of Dec. 31, 2025.
As of the third quarter, the company had $13.45 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 5.09%.
Hilton had no outstanding borrowings under its revolving credit facility, which had approximately $1.89 billion in available borrowing capacity.
During the quarter, the company repurchased 2.6 million shares for $845 million. Total capital returns, including dividends, were $879 million during the quarter and $2.90 billion year to date.
HLT's Business Updates
In the third quarter of 2026, Hilton opened 182 hotels comprising 27,000 rooms, resulting in 23,000 net room additions. Net room additions increased 6.5% sequentially from the second quarter of 2026.
The company achieved net unit growth of 6% from Sept. 30, 2025. Hilton also approved 30,500 rooms for development during the quarter.
As of Sept. 30, 2026, Hilton's development pipeline comprised 3,869 hotels, representing 543,100 rooms across 135 countries and territories. The pipeline increased 5% year over year.
During the quarter, Hilton opened its first hotels under Select by Hilton. Notable openings included Hale Hokuala Kauai, Curio Collection by Hilton, and Den Bengaluru, LXR Hotels & Resorts, marking the respective brands' debuts in Hawaii and India.
Hilton's Q4 & 2026 Outlook
For fourth-quarter 2026, Hilton anticipates net income between $508 million and $522 million. Adjusted EBITDA is expected to be between $1.05 billion and $1.07 billion. It predicts adjusted earnings per share between $2.32 and $2.38. Management forecasts system-wide comparable RevPAR growth of 3-3.5% year over year on a currency-neutral basis.
For 2026, Hilton estimates net income between $1.91 billion and $1.92 billion. Adjusted EBITDA is expected to be between $4.06 billion and $4.08 billion. It predicts adjusted earnings per share between $9.07 and $9.13.
Management anticipates full-year system-wide comparable RevPAR growth of 4-4.5% year over year, up from its previous expectation of 3-3.5%. Net unit growth is expected between 6% and 7%, with performance around the midpoint of the range, while capital returns are projected to be approximately $3.5 billion.
HLT’s Zacks Rank & Key Picks
Hilton currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Consumer-Discretionary sector are Cinemark Holdings, Inc. CNK, AMC Entertainment Holdings, Inc. AMC and Academy Sports and Outdoors, Inc. ASO.
Cinemark presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Cinemark delivered a trailing four-quarter earnings surprise of 10.9%, on average. The stock has surged 67.7% in the year-to-date period. The Zacks Consensus Estimate for CNK’s 2026 sales and EPS implies growth of 17.7% and 155.8%, respectively, from the year-ago levels.
AMC Entertainment presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 321.7%, on average. The stock has rallied 85.3% in the year-to-date period.
The Zacks Consensus Estimate for AMC’s 2026 sales and EPS indicates an increase of 18.8% and 91.7%, respectively, from the year-ago levels.
Academy Sports currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings beat of 4%, on average. The stock has gained 19.3% in the year-to-date period.
The Zacks Consensus Estimate for ASO’s 2027 sales and EPS indicates growth of 4.2% and 15.4%, respectively, from the year-ago period’s levels.
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Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).