Travel + Leisure Co. (NYSE:TNL) reported fourth-quarter financial results that surpassed analyst expectations, driven by continued strength in its core vacation ownership segment. The leisure travel company's performance and forward-looking guidance have been met with a positive initial reaction in pre-market trading.
Earnings and Revenue vs. Estimates
The company's key profitability metric, adjusted earnings per share (EPS), came in ahead of Wall Street forecasts for the quarter. Revenue also exceeded expectations, indicating robust demand for its vacation ownership products.
- Adjusted EPS: Reported $1.83, beating the analyst estimate of $1.82.
- Revenue: Reported $1.026 billion, surpassing the consensus estimate of $1.011 billion.
For the full year 2025, the company reported adjusted EPS of $6.34 on net revenue of $4.02 billion. The annual results were bolstered by gross vacation ownership interest (VOI) sales of $2.49 billion, an 8% increase over the prior year.
Market Reaction and Price Action
Investors responded favorably to the earnings beat and the company's outlook. In pre-market trading following the release, TNL shares were up approximately 1.56%. This positive movement suggests the market views the results and guidance as a sign of resilient operational performance and effective management of recent strategic initiatives.
Key Highlights from the Quarterly Report
The quarter was characterized by strong growth in the flagship Vacation Ownership business, offset by a significant one-time charge related to a portfolio optimization strategy.
- Vacation Ownership Strength: Segment revenue grew 8% year-over-year to $875 million in Q4, with Adjusted EBITDA jumping 14% to $252 million. Growth was driven by a 5% increase in sales tours and a 2% rise in volume per guest (VPG).
- Resort Optimization Initiative: The company recorded $210 million in inventory write-downs and impairments in Q4 as part of a plan to optimize its resort portfolio. This strategic review identified 17 resorts for exit or repositioning. While this caused a GAAP net loss of $61 million for the quarter, management expects the initiative to yield a net positive impact on Adjusted EBITDA beginning in 2026 through reduced maintenance fee expenses.
- Shareholder Returns: The board approved a new $750 million share repurchase authorization. For Q1 2026, management will recommend a dividend increase to $0.60 per share.
- Solid Liquidity: The company ended the year with $1.15 billion in total liquidity.
2026 Outlook vs. Analyst Expectations
Travel + Leisure provided guidance for the coming year that appears generally in line with or slightly ahead of current analyst projections, reinforcing confidence in sustained demand.
The company's full-year 2026 Adjusted EBITDA guidance of $1.03 to $1.055 billion implies growth from the $990 million reported in 2025. Its forecast for Gross VOI sales of $2.5 to $2.6 billion compares to the analyst sales estimate of $4.211 billion for 2026; it is important to note that "sales" estimates from analysts may encompass total company revenue, while the company's VOI sales guidance is for its largest segment. The provided analyst revenue estimate for FY 2026 is $7.29 billion.
For the first quarter of 2026, the company expects Adjusted EBITDA between $210 and $220 million and Gross VOI sales between $520 and $540 million.
For a detailed look at upcoming earnings dates and a complete history of analyst estimates, visit the TNL earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, an endorsement, or a recommendation to buy, sell, or hold any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
