Will Unit Growth Offset RevPAR Pressures in HLT's Q3 Earnings?

Hilton Worldwide Holdings Inc. HLT is scheduled to report third-quarter 2025 results on Oct. 22, before the opening bell.

HLT’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 5.8%.

Trend in Estimate Revision of HLT

The Zacks Consensus Estimate for third-quarter earnings per share (EPS) is pegged at $2.04, indicating growth of 6.3% from the $1.92 reported in the year-ago quarter.

For revenues, the consensus mark is pegged at $3.02 billion. The metric implies a rise of 5.2% from the year-ago quarter’s reported figure.

Let us take a look at how things are expected to have shaped up for the quarter under review.

Factors Likely to Shape Hilton’s Q3 Quarterly Results

HLT’s third-quarter 2025 top line is likely to have been aided by net unit growth and a robust loyalty program. Steady net unit growth has been a central driver, with strong hotel openings and conversions across global markets adding meaningfully to the top line. Expansion in luxury and lifestyle brands, such as Waldorf Astoria, Conrad and Curio, has further elevated Hilton’s brand presence and pricing power.

Continued momentum in the Middle East and Africa region is expected to have aided the quarterly performance, as those regions have seen sustained travel demand around key events and holidays. The Hilton Honors loyalty program, with membership growth reaching more than 226 million, is expected to have strengthened repeat business and reinforced its global commercial engine, enhancing revenue resilience.

Rising corporate booking activity and sequential improvements in group demand are anticipated to have provided additional revenue support, particularly as convention and business travel slowly recover. Together, these factors indicate that despite modest RevPAR pressures in some markets, Hilton’s brand strength, loyalty scale and pipeline expansion are likely to have continued to driven top-line growth.

Our model predicts revenues from management and franchise hotels to grow 9.5% year over year to $932.9 million. Also, we estimate franchise and licensing fees to rise 8.7% year over year to $758.4 million.

On the bottom line, Hilton is likely to have benefited from disciplined cost control. Franchise and management fee growth, combined with operating leverage from a larger room base, is expected to have supported profitability despite muted RevPAR trends. Our model predicts RevPAR to decline 0.6% year over year.

What Our Model Says About HLT Stock

Our proven model does not predict 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. This is not the case here.

HLT’s Earnings ESP: Hilton has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

HLT’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 have the right combination of elements to post an earnings beat.

Norwegian Cruise Line Holdings Ltd. NCLH has an Earnings ESP of +0.06% and flaunts a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
 
Norwegian Cruise Line is expected to register a 17.2% increase in earnings for the to-be-reported quarter. With the average surprise being 29.1%, Norwegian Cruise Line reported better-than-expected earnings in two of the trailing four quarters and missed on two occasions.
 
Boyd Gaming Corporation BYD currently has an Earnings ESP of +4.25% and a Zacks Rank of 2.
 
Its earnings for the to-be-reported quarter are expected to increase 1.3%. Boyd Gaming reported better-than-expected earnings in the trailing four quarters, the average surprise being 9.1%.
 
PENN Entertainment, Inc. PENN presently has an Earnings ESP of +89.87% and a Zacks Rank of 2.

Its earnings for the to-be-reported quarter are expected to increase 58.3%. PENN Entertainment reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 92.7%.

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

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