Travel + Leisure Co. Q1 FY2026 earnings call

Michael Brown noted first quarter EBITDA exceeded guidance driven by strong execution in vacation ownership and resilient owner demand; achieved 7% gross VOI sales growth, 180 basis points EBITDA margin expansion, and 31% EPS growth. Progressed multi-brand strategy with Margaritaville approaching $150 million in annual VOI sales, Accor Vacation Club expected to nearly double VOI sales in 2026, Eddie Bauer Adventure Club sold at select sales centers, and Sports Illustrated Resorts started sales at new center and announced new location. Advanced resort optimization initiative, realizing expense savings and maintaining historical sales growth rates. Returned $128 million to shareholders through dividends and share repurchases. Eric Hogue stated first quarter results ahead of expectations, vacation ownership business showed steady demand with gross VOI sales $549 million, up 7% year-over-year, segment EBITDA up 20% year-over-year; travel and membership business had flat transactions with mix shift impacting revenue and EBITDA; balance sheet had leverage in line with expectations and strong liquidity; capital allocation framework focused on high risk-adjusted return and returning excess capital to shareholders.

First quarter revenue was $961 million, EBITDA was $225 million, and EPS was $1.45. For the vacation ownership segment: gross VOI sales grew 7% in the quarter, segment EBITDA was $191 million, up 20% year-over-year. For the travel and membership segment: transactions were flat year-over-year, exchange membership was approximately 3.3 million subscribers, down about 2% year-over-year, segment revenue was $165 million, down 8% year-over-year, and segment EBITDA was $59 million, down 13%.

Reiterates full-year outlook with gross VOI sales expected in the range of $2.5 to $2.6 billion, EBITDA in the range of $1.03 to $1.055 billion, and volume per guest in the range of $3,175 to $3,275. Expect to convert roughly half of full-year EBITDA into free cash flow. Second quarter expected gross VOI sales in the range of $660 to $690 million, EBITDA in the range of $260 to $270 million, and volume per guest in the range of $3,200 to $3,250.

Macro economic uncertainty and geopolitical risk; early-stage delinquencies in more recent loan vintages, though provision rate expected to be modestly below prior year levels; potential conservatism in consumer travel behavior such as shrinking booking windows and transition to drive-to destinations, but current trends not noticeably affected.

Q: Chris Verranca asked about the extent of growth of new brands and hotel conversion opportunities.

A: Michael Brown responded on growth potential of brands and their execution.

Q: Chris Verranca asked about early delinquency activity and re-acquiring inventory.

A: Eric responded on loan loss provision and ability to re-acquire inventory.

Q: Patrick Scholes asked about new owner mix and early delinquencies.

A: Mike and Eric responded on new owner mix conversion dynamics and early delinquency characteristics.

Q: Steven Grambling asked about new owner mix conversion dynamics and free cash flow.

A: Mike and Eric responded on conversion dynamics and free cash flow outlook.

Q: Ben Chaykin asked about WorldMark and Eddie Bauer upgrade opportunities and exchange business.

A: Mike responded on upgrade opportunities and Eric responded on exchange business stance.

Q: Ian Sofino asked about VPG and Iran impact.

A: Mike and Eric responded on VPG cadence and Iran impact on travel behavior.

Q: Branch Montour asked about delinquency and AI use.

A: Eric responded on delinquency monitoring and AI plans for distribution.