Travel + Leisure’s third quarter was marked by continued momentum in its Vacation Ownership segment and strong execution across its core operations, resulting in financial results that surpassed Wall Street’s expectations. Management attributed the positive performance to robust leisure travel demand and sustained improvements in tour quality and owner engagement. CEO Michael Brown highlighted that “this marks our 18th consecutive quarter with VPGs over 3,000 since we changed our credit quality standards in 2020,” emphasizing the resilience of the company’s customer base and effectiveness of recent investments in digital innovation and brand portfolio expansion.
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Travel + Leisure (TNL) Q3 CY2025 Highlights:
- Revenue: $1.04 billion vs analyst estimates of $1.03 billion (5.1% year-on-year growth, 1% beat)
- Adjusted EPS: $1.80 vs analyst estimates of $1.71 (5.2% beat)
- Adjusted EBITDA: $266 million vs analyst estimates of $254.8 million (25.5% margin, 4.4% beat)
- EBITDA guidance for the full year is $975 million at the midpoint, in line with analyst expectations
- Operating Margin: 20.5%, up from 19% in the same quarter last year
- Tours Conducted: 200,000, up 5,000 year on year
- Market Capitalization: $4.16 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Travel + Leisure’s Q3 Earnings Call
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Chris Woronka (Deutsche Bank) asked about the drivers behind strong Vacation Ownership performance and how demographic shifts and credit standards contributed. CEO Michael Brown attributed success to improved digital tools and a focus on higher-income, higher-credit customers.
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Benjamin Chaiken (Mizuho) probed the surge in Travel Club transactions and whether it was due to comp dynamics or structural changes. Brown explained it was the result of multi-year marketing efforts targeting profitable clubs and increased transaction propensity.
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Charles Scholes (Truist Securities) questioned the impact of lower securitization coupons on growth headwinds. CFO Erik Hoag said lower funding costs are creating a multi-year tailwind for the business.
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Brandt Montour (Barclays) inquired about new owner close rates and demand trends. Brown noted that new owner VPG was up year-over-year, with positive momentum expected to accelerate in the next quarter.
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Elizabeth Dove (Goldman Sachs) asked about the outlook for loan loss provisions. Hoag replied that provisions are expected to trend down toward the upper teens as credit performance stabilizes.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the rollout and initial sales performance of new branded resorts such as Sports Illustrated and Eddie Bauer, (2) continued growth in digital engagement metrics through expanded app usage and AI-driven personalization, and (3) the effectiveness of efforts to optimize profitability in the Travel and Membership segment as the business mix evolves. Execution on these fronts will be key indicators of sustainable growth.
Travel + Leisure currently trades at $64.65, up from $60.67 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).
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