Hilton Grand Vacations Reports First Quarter 2021 Results

Rhea-AI Summary

Hilton Grand Vacations (HGV) reported its Q1 2021 results, showing contract sales of $139 million and total revenues of $235 million, down from $351 million in 2020. The company experienced a net loss of $7 million, compared to a net income of $8 million a year earlier, with diluted EPS at ($0.08). Adjusted EBITDA increased to $42 million from $33 million in Q1 2020. The pandemic continued to affect operations, but roughly 80% of resorts and nearly all sales centers are now open. Management expresses optimism about leisure travel recovery, supported by government assistance and the upcoming acquisition of Diamond Resorts.

Positive

• Adjusted EBITDA increased to $42 million from $33 million year-over-year.
• Management noted a strong performance in the spring break travel season.
• Acquisition of Diamond Resorts is on track for a summer close.

Negative

• Total revenues decreased by 33% from $351 million in Q1 2020 to $235 million in Q1 2021.
• Net loss of $7 million reported, a turnaround from $8 million net income in the previous year.
• Continued uncertainty due to the COVID-19 pandemic affecting operational stability.

Hilton Grand Vacations Inc. (NYSE:HGV) (“HGV” or “the Company”) today reports its first quarter 2021 results.

First Quarter 2021 Results¹

• Contract sales in the first quarter were $139 million.
• Net Owner Growth (NOG) for the 12 months ended March 31, 2021, was (0.1)%.
• Total revenues for the first quarter were $235 million compared to $351 million for the same period in 2020.
  • Total revenues were affected by deferrals of $32 million and $47 million in the current period and the same period in 2020, respectively.
• Net loss for the first quarter was ($7) million compared to $8 million net income for the same period in 2020.
  • Net (loss) income was affected by net deferrals of $18 million and $27 million for the current period and the same period in 2020, respectively.
• Diluted EPS for the first quarter was ($0.08) compared to $0.09 for the same period in 2020.
  • Diluted EPS was affected by net deferrals of $18 million and $27 million, or $0.21 and $0.31 per share in the current period and the same period in 2020, respectively.
• Adjusted EBITDA for the first quarter was $42 million compared to $33 million for the same period in 2020.
  • Adjusted EBITDA was affected by net deferrals of $18 million and $27 million in the current period and the same period in 2020, respectively.
• In addition to the adverse impact from the closure of HGV sales centers and resort operations, the COVID-19 pandemic had the following impacts on total revenues, net loss, diluted EPS and Adjusted EBITDA for the first quarter:
  • $4 million or $0.05 per share benefit from government assistance from Japan and an employee retention credit granted under the CARES Act, primarily related to payments made to employees as a result of operational closures caused by the COVID-19 pandemic.

“2021 introduced a wave of optimism fueled by the rollout of vaccines and an increasingly positive outlook for leisure travel, which was reflected in another quarter of sequential improvement at HGV,” said Mark Wang, president and CEO of Hilton Grand Vacations. “Our performance ramped into a strong spring break travel season, and that trend has continued into April. This momentum makes us confident in the continued leisure travel recovery as we move through this year, and it underscores our confidence in our recently announced acquisition of Diamond Resorts, which remains on track for a summer transaction close.”

COVID-19 Update

The COVID-19 pandemic has created an unprecedented and challenging environment. The Company’s current focus is on taking critical actions that are aimed at keeping the Company in a sound position from an operational, liquidity, credit access, and compliance perspective for a strong recovery when the impact of COVID-19 subsides. Management will continue to assess the evolving COVID-19 pandemic, including the various government mandates and orders that impact the re-opening of its properties and any new recommended or required business practices, and will take additional actions as appropriate.

As of March 31, 2021, the Company has approximately 80% of its resorts and nearly all its sales centers open and operating. However, some of HGV’s resorts and sales centers are operating in markets with capacity constraints and subject to various safety measures, which are impacting consumer demand for resorts in those markets. As HGV responds to changes in tour flow, the Company intends to adjust its sales operations accordingly, while complying with all applicable social distancing rules and its own safety measures.

While HGV plans to continue to re-open its resorts and resume business as conditions permit, the pandemic continues to be unprecedented and rapidly changing, and has unknown duration and severity. Further, various state and local government officials may issue new or revised orders that are different than current ones under which the Company is operating.

Accordingly, there remains significant uncertainty as to the degree of impact and duration of the conditions stemming from the ongoing pandemic on the Company’s revenues, net income (loss) and other operating results, as well as its business and operations generally.

Overview

For the quarter ended March 31, 20

FAQ

What were Hilton Grand Vacations' Q1 2021 revenues?

Hilton Grand Vacations reported Q1 2021 revenues of $235 million, down from $351 million in the same period in 2020.

What was the net loss for Hilton Grand Vacations in Q1 2021?

The net loss for Hilton Grand Vacations in Q1 2021 was $7 million.

What is the diluted EPS for HGV in Q1 2021?

The diluted EPS for Hilton Grand Vacations in Q1 2021 was ($0.08), compared to $0.09 in Q1 2020.

How did COVID-19 impact Hilton Grand Vacations' operations?

COVID-19 impacted Hilton Grand Vacations by leading to operational closures, resulting in a significant decrease in revenues and a net loss.

What is the company's outlook regarding leisure travel recovery?

Management expressed optimism about the recovery of leisure travel, noting improvements in performance as vaccines rollout.