Travel + Leisure (TNL) Q4 2023 earnings summary

Executive summary

• Q4 2023 net revenue was $935M, net income $129M, diluted EPS $1.77, Adjusted EBITDA $240M and Adjusted diluted EPS $1.98.

• FY 2023 net revenue was $3.75B, net income $396M, diluted EPS $5.28, Adjusted EBITDA $908M and Adjusted diluted EPS $5.70.

• Stronger vacation ownership sales and Adjusted EBITDA supported $443M of shareholder returns through dividends and repurchases in 2023.

Financial highlights

• Q4 net revenue increased to $935M from $899M YoY; net income was $129M versus $90M, including a $0.37 diluted EPS benefit from a partial reversal of a foreign tax credit valuation allowance.

• FY net revenue increased to $3.75B from $3.57B; net income was $396M versus $357M, including a $0.35 diluted EPS benefit from the valuation allowance reversal.

• Adjusted EBITDA was $240M in Q4 versus $225M and $908M for FY versus $859M; Adjusted diluted EPS was $1.98 and $5.70, respectively.

• FY operating cash flow was $350M versus $442M; Adjusted free cash flow was $379M versus $439M.

Outlook and guidance

• FY 2024 Adjusted EBITDA guidance is $910M–$930M; Gross VOI sales $2.25B–$2.35B; VPG $2,900–$3,000.

• Q1 2024 Adjusted EBITDA guidance is $185M–$190M; Gross VOI sales $460M–$480M; VPG $2,925–$3,025; Travel and Membership Adjusted EBITDA $75M–$80M.

• A 100 bps change in Vacation Ownership tours or VPG is expected to change FY Adjusted EBITDA by $6M or $11M, respectively; actual sensitivity may vary with brand, geography and market mix.

• Management planned to recommend a Q1 2024 dividend of $0.50 per share for Board approval.