Timeshare vacation company Hilton Grand Vacations (NYSE: HGV) fell short of the market’s revenue expectations in Q2 CY2026, but sales rose 7.3% year on year to $1.36 billion. Its non-GAAP profit of $0.89 per share was 11.7% below analysts’ consensus estimates.
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Hilton Grand Vacations (HGV) Q2 CY2026 Highlights:
- Revenue: $1.36 billion vs analyst estimates of $1.4 billion (7.3% year-on-year growth, 2.7% miss)
- Adjusted EPS: $0.89 vs analyst expectations of $1.01 (11.7% miss)
- Adjusted EBITDA: $265 million vs analyst estimates of $291 million (19.5% margin, 8.9% miss)
- Operating Margin: 6.7%, down from 8.8% in the same quarter last year
- Free Cash Flow Margin: 8.3%, down from 10.7% in the same quarter last year
- Members: in line with the same quarter last year
- Market Capitalization: $4.04 billion
Company Overview
Spun off from Hilton Worldwide in 2017, Hilton Grand Vacations (NYSE: HGV) is a global timeshare company that provides travel experiences for its customers through its timeshare resorts and club membership programs.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Hilton Grand Vacations grew its sales at a 36.9% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. Hilton Grand Vacations’s recent performance shows its demand has slowed as its annualized revenue growth of 9.2% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
We can dig further into the company’s revenue dynamics by analyzing its number of members, which reached 720,000 in the latest quarter. Over the last two years, Hilton Grand Vacations’s members averaged 5.3% year-on-year growth. Because this number is lower than its revenue growth during the same period, we can see the company’s monetization has risen. 
This quarter, Hilton Grand Vacations’s revenue grew by 7.3% year on year to $1.36 billion, missing Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 9.8% over the next 12 months, similar to its two-year rate. This projection is underwhelming and implies its newer products and services will not accelerate its top-line performance yet.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Hilton Grand Vacations’s operating margin has generally stayed the same over the last 12 months, and we generally like to see margin increases due to economies of scale and cost efficiency over time.
This quarter, Hilton Grand Vacations generated an operating margin profit margin of 6.7%, down 2.1 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Hilton Grand Vacations’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.
In Q2, Hilton Grand Vacations reported adjusted EPS of $0.89, up from $0.54 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Hilton Grand Vacations’s full-year EPS to grow 55.6% from $3.36 to $5.23.
Key Takeaways from Hilton Grand Vacations’s Q2 Results
We struggled to find many positives in these results. Its EPS missed and its revenue fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 5.2% to $48.73 immediately after reporting.
Hilton Grand Vacations may have had a tough quarter, but does that actually create an opportunity to invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
