Hilton Stock Jumps as Luxury Brands Boost Earnings

Not everyone is scaling back on discretionary spending.

Aided by gains in its luxury brands, Hilton Worldwide Holdings (HLT) reported better-than-expected third-quarter results. Hilton stock was among the top gainers in the S&P 500 Wednesday morning, up 5% recently and trading near an all-time high.

The McLean, Va.-based company posted adjusted earnings of $2.11 per share on revenue that rose almost 9% year-over-year to $3.12 billion. Analysts polled by Visible Alpha had expected $2.06 and $3.01 billion, respectively.

Revenue per available room (RevPAR), an important measure of hotel performance, rose at luxury brands LXR, Conrad and Waldorf Astoria by 6.4%, 2.6%, and 1.7%, respectively—indicating a continued interest in travel among more affluent consumers.

Overall, system-wide RevPAR decreased 1.1%, slightly worse than expected. The drop was due to “modest occupancy” and declines in daily rates, Hilton said. That figure in the U.S. fell by 2.3% but was buoyed by a 9.9% increase in Africa and the Middle East.

Hilton now sees full-year RevPAR from flat to up 1% versus the prior projection of flat to up 2%, but lifted its adjusted EPS guidance to a range of $7.97 to $8.06 from $7.83 to $8.00.

“We remain optimistic that in the U.S., lower interest rates, a more favorable regulatory environment, certainty on tax policy and a significant investment cycle will accelerate economic growth and travel demand,” CEO Christopher Nassetta said.

Hilton shares had gained about 8% so far this year coming into today’s session.