Travel + Leisure slides in early reaction to earnings

Travel + Leisure Co. (NYSE:TNL) traded lower after an earnings report that featured solid growth in revenue (+29%), adjusted EBITDA growth (+64%) and net income growth (+341%) against a soft pandemic comparable.

The travel company said strong leisure and everyday business travel demand drove RevPAR 4% above 2019 levels domestically. Management also noted that it continued to simplify its operations by exiting select-service management business and selling one of its two owned assets.

The development pipeline increased 9% during the quarter to a record 204,000 rooms, including the first 50 deals for our new extended-stay product, and room openings grew 50% more than last year, putting TNL solidly on track with full year net-room growth guidance.

Jefferies analyst David Katz said the modest upside to quarterly results and increased capital returns should result in a positive reaction for the TNL shares given the broader market skittishness.

“The growing perspective of TNL and peers as a value leisure travel alternative in an inflationary environment should draw increased attention from the Street. The quarter begins to highlight the positive positioning of the business as recovery continues,” update Katz.

travel + Leisure (TNL) traded 4.00% lower in premarket action in the initial reaction from investors to the earnings release.