Hilton Gears Up to Post Q2 Earnings: What's in Store for the Stock?

Hilton Worldwide Holdings Inc. HLT is scheduled to report second-quarter 2025 results on July 23, before the opening bell.

HLT’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.7%. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

Trend in Estimate Revision of HLT

The Zacks Consensus Estimate for second-quarter earnings per share (EPS) is pegged at $2.03, indicating growth of 6.3% from $1.91 reported in the year-ago quarter.

Hilton Worldwide Holdings Inc. Price and EPS Surprise

Hilton Worldwide Holdings Inc. price-eps-surprise | Hilton Worldwide Holdings Inc. Quote

For revenues, the consensus mark is pegged at nearly $3.06 billion. The metric suggests a rise of 3.6% from the year-ago quarter’s figure.

Let’s take a look at how things have shaped up in the quarter.

Factors Likely to Shape Hilton’s Q2 Quarterly Results

Hilton’s second-quarter performance is likely to have benefited from sustained group travel strength, international development momentum and non-RevPAR fee growth.

Strong contributions from high-margin management and franchise fees are expected to have driven Hilton’s top-line performance. The company’s fee-based business model — supported by hotel openings, strong brand conversions and broad geographic diversification — likely remained a core revenue driver in the second quarter. Recent openings in the luxury and lifestyle segment, including Waldorf Astoria properties in Costa Rica and Osaka, may have further enhanced fee income and portfolio positioning.

Our model predicts revenues from management and franchise hotels to grow 6.5% year over year to $905.6 million. Our model estimates franchise and licensing fees to rise 8.1% year over year to $745 million.

Growth in Hilton Honors membership, stable performance from small and mid-sized business travel and increased conversion activity are also expected to have played a key role. A diversified development pipeline and momentum across brands like Spark, Tapestry and Hampton — particularly in fast-growing international markets — are likely to have aided system growth and franchise fee expansion. Hilton expects second-quarter adjusted EBITDA to be between $940 million and $960 million.

However, macroeconomic challenges such as cost inflation, foreign currency headwinds and ongoing uncertainty around large corporate travel may have exerted some pressure on Hilton’s bottom line. Additionally, subdued leisure demand — impacted in part by calendar shifts and cautious consumer behavior — may have limited growth rate in certain markets.

Hilton projects second-quarter diluted EPS adjusted for special items to be between $1.97 and $2.02.

What Our Model Says About HLT Stock

Our proven model predicts an earnings beat for Hilton this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here.

Earnings ESP for HLT: Hilton has an Earnings ESP of +2.70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Hilton’s Zacks Rank: The company has a Zacks Rank #3 at present.

Stocks Poised to Beat on Earnings

Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider, as our model shows that these, too, have the right combination of elements to post an earnings beat.

MGM Resorts International MGM has an Earnings ESP of +2.45% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

MGM Resorts is expected to register a 36.1% decline in earnings for the to-be-reported quarter. MGM Resorts reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 25.5%.

Boyd Gaming Corporation BYD currently has an Earnings ESP of +0.81% and a Zacks Rank of 3.

Boyd Gaming earnings for the to-be-reported quarter are expected to increase 5.1%. Boyd Gaming reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 8%.

PENN Entertainment, Inc. PENN currently has an Earnings ESP of +26.91% and a Zacks Rank of 3.

PENN Entertainment’s earnings for the to-be-reported quarter are expected to increase 61.1%. PENN reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 13.5%.

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This article originally published on Zacks Investment Research (zacks.com).

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