On July 24, 2024, Travel+Leisure Co (TNL, Financial) released its 8-K filing for the second quarter of 2024, reporting financial results for the three months ended June 30, 2024. Travel+Leisure Co is a membership and leisure travel company that provides hospitality services and travel products, operating primarily in the United States.
Performance Overview
Travel+Leisure Co reported net income of $129 million, translating to $1.36 diluted earnings per share from continuing operations, on net revenue of $985 million. This compares to analyst estimates of $1.40 earnings per share and $987.87 million in revenue. Despite missing revenue and EPS estimates, the company achieved an adjusted EBITDA of $244 million and adjusted diluted earnings per share of $1.52, surpassing expectations.
Company Segments and Revenue Drivers
The company operates in two main segments: Vacation Ownership and Travel and Membership. The Vacation Ownership segment, which is the key revenue-driving segment, saw a 5% increase in revenue to $807 million compared to the same period last year. This growth was driven by a 13% increase in tours and a 22% increase in new owner tours. However, the Travel and Membership segment experienced a slight decline in revenue, down 1% to $177 million.
Financial Achievements and Challenges
Travel+Leisure Co's financial achievements include a 10% increase in adjusted EBITDA for the Vacation Ownership segment, reaching $206 million. The company also returned $105 million to shareholders through dividends and share repurchases. However, challenges such as increased marketing costs, higher sales and commission expenses, and rising interest rates on ABS debt impacted overall profitability.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Revenues | $985 million | $949 million | 4% |
| Net Income | $129 million | $94 million | 37% |
| Adjusted EBITDA | $244 million | $236 million | 3% |
| Adjusted Net Income | $108 million | $100 million | 8% |
Balance Sheet and Cash Flow
As of June 30, 2024, Travel+Leisure Co had $3.6 billion of corporate debt outstanding, excluding $2.0 billion of non-recourse debt related to its securitized notes receivables portfolio. The company repaid $300 million of secured notes due April 2024 and closed a $375 million term securitization transaction with a weighted average coupon of 5.6%. Net cash provided by operating activities for the first half of 2024 was $221 million, a significant increase from $110 million in the prior year period.
Outlook and Guidance
Travel+Leisure Co has raised its full-year 2024 adjusted EBITDA guidance to a range of $915 million to $935 million. The company expects third-quarter adjusted EBITDA to be between $235 million and $245 million. The outlook reflects strong consumer demand for vacation ownership and the company's resilient business model.
"For the second quarter, we delivered volume per guest over $3,000 and double-digit increases in both tours and new owner tours. All indications are pointing to a solid second half of 2024," said Michael D. Brown, President and CEO of Travel+Leisure Co.
Overall, Travel+Leisure Co's Q2 2024 earnings report presents a mixed picture, with some metrics exceeding expectations while others fell short. The company's strong performance in the Vacation Ownership segment and its ability to return capital to shareholders are positive signs, but challenges such as increased costs and higher interest rates need to be monitored closely.
Explore the complete 8-K earnings release (here) from Travel+Leisure Co for further details.
