Please provide more color on the VPG pressure specifically from the Bluegreen portfolio and any performance differences between financial demographics.

Bluegreen VPG pressure was primarily due to lapping a 45% VPG increase in Q2 FY25 from the successful HGV Max launch and execution challenges at Orlando/Myrtle Beach sites. Demand for Bluegreen was strong, with 10% tour growth and 16% new buyer transactions. The legacy business performed solidly. “the miss was not related to consumer demand. Tour flow for Bluegreen was up 10%. New buyer transactions were up 16% to prior year for Bluegreen.”

What were the specific sales execution issues in Orlando and Myrtle Beach, and how should we conceptualize the proceeds from the asset streamlining transaction?

The execution issues were leadership-related in specific markets, not a broader market or integration problem. Leadership changes, recruiting, and training investments are being implemented. For asset streamlining, HGV will receive a significant portion of proceeds from future property sales by the third party, structured as a contractual waterfall arrangement. “the divergence from what you're seeing from the demand that's being created in those markets from the rest really gives us confidence that this was an execution issue in a couple of those bigger markets.”

HGV

Hilton Grand Vacations (HGV) Q2 FY26 earnings call: guidance and Q&A

Q: Can you clarify the 400 basis point year-over-year increase in the loan loss provision and confirm the mid-teens full-year expectation?

The 17% provision in Q2 was due to higher borrowing propensity and a mix shift to higher-provisioned trust/new buyer sales, not portfolio deterioration. Delinquencies improved for Diamond and Bluegreen due to underwriting changes. Management expects the provision to improve in the second half, keeping it within the mid-teens range for the full year. “our provision for the quarter was roughly 17%, which is definitely at the high end of our mid-teens range. But nearly actually a little bit just at a point is associated with a higher propensity to borrow that we saw with the buyers coming through the door as well as a mix to a higher percent of product being sold under the trust product.”

Q: Regarding the VPG miss, which component—closeout rates or average transaction size—missed expectations?

VPG pressure primarily stemmed from a mix shift: higher trust sales, which carry a lower average transaction price and VPG, and a higher mix of new buyer transactions, which also pressure VPG. This is viewed as short-term pressure for long-term value by expanding the MAX ecosystem and upgrade opportunities. “the pressure on VPG was from a mix standpoint, moving to more trust and moving to more new buyer transactions. But this puts short-term pressure but has attractive long-term value for us because we're bringing in new members into the MAX ecosystem.”

Earnings call· Jun 2026 (Q2 FY26)· Real Estate· Jul 30, 2026

Source: earnings call transcript

Executive summary

Hilton Grand Vacations Q2 FY26 — Strong EBITDA and Tour Growth Amidst Sales Execution Challenges

Hilton Grand Vacations delivered solid Q2 FY26 adjusted EBITDA and robust tour growth, demonstrating underlying business strength and operational efficiency. However, contract sales faced headwinds from VPG moderation at Bluegreen and sales execution issues, prompting management to implement corrective actions. The company remains committed to its full-year EBITDA and free cash flow outlook, focusing on strategic investments, cost discipline, and capital returns to shareholders.

Highlights

Generated 239,000 tours in the quarter, an increase of 6% versus the prior year, marking the fourth consecutive quarter of consolidated tour growth.
Adjusted EBITDA grew 5% to $293 million, with margins expanding to 23%.
New buyer tours increased at a high single-digit rate, supporting long-term embedded value.
Repurchased $150 million of shares in the quarter, with year-to-date repurchases totaling over $300 million (over 10% of float).
Closed disposition of noncore assets, expected to reduce maintenance fee burden by $10 million to $12 million annually on a run-rate basis.

Concerns

Contract sales declined versus the prior year, primarily due to VPG moderation at Bluegreen and sales execution shortcomings.
VPG was down 9% to approximately $3,400 in the quarter.
Provision for bad debt was 17% of owned contract sales, at the high end of the mid-teens range.
Club business expenses remained slightly elevated due to timing of headcount additions.

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted EBITDA before deferrals	$1.225 billion to $1.265 billion high materiality	FY26	High
Tour growth	positive low to mid-single digits medium materiality	FY26	High
Tour growth	low single-digit growth medium materiality	Q3 · FY26	Medium
VPG (Volume Per Guest)	decline in the low to mid-single digits high materiality	FY26	Medium
VPG (Volume Per Guest)	decline in the high single digits high materiality	Q3 · FY26	Medium
Contract sales	flat to down slightly high materiality	FY26	Medium
Contract sales	down in the mid-single digits high materiality	Q3 · FY26	Medium
Share repurchase pace	approximately $150 million per quarter high materiality	Ongoing	High
Adjusted free cash flow conversion rate	lower half of our long-term target range of 55% to 65% medium materiality	FY26	High
Elara EBITDA benefit	$25 million to $30 million medium materiality	Annualized for next year · FY27	High
Maintenance fee burden reduction	$10 million to $12 million medium materiality	Run rate basis	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Real Estate Business Contract sales declined due to VPG moderation at Bluegreen, execution challenges, and mix shifts. New buyer contract sales and tours showed strong growth. Cost of product and sales and marketing expense as a percentage of contract sales improved, leading to profit margin expansion. Contract sales: $810 millionNew buyer contract sales: 28% of total volumeNew buyer contract sales growth: 70 bps (vs prior period)Tours: 239,000Tours growth: 6% (YoY)VPG: $3,400VPG decline: 9% (YoY)Cost of product: 10%Cost of product decline: 130 bps (YoY)Sales and marketing expense: $397 millionSales and marketing expense as % of contract sales: 49%Sales and marketing expense decline: 40 bps (YoY)Profit growth: 7% (YoY)Profit margin: 28%Profit margin expansion: 220 bps (YoY)	—	-3%	—	$173 million
Financing Business Revenue and profit were strong, with financing margins expanding. The portfolio remains in good shape, with stable delinquency trends. Financing margins (excluding amortization): 62%Financing margins expansion: 100 bps (YoY)	$144 million	—	—	$86 million
Resort and Club Business Revenue grew, driven by continued member additions, particularly HGV Max. Expenses were slightly elevated due to headcount additions, but margins are expected to normalize by year-end. Consolidated member count: 722,000HGV Max members: 300,000HGV Max members as % of base: 40%HGV Max members growth: 24% (YoY)Profit margin: 68%	$189 million	3%	—	$128 million
Rental and Ancillary Revenues Revenue growth was driven by RevPAR and increased room nights. The segment reported a loss primarily due to developer maintenance fees, which the company is actively working to reduce through inventory optimization. RevPAR growth: (vs prior year)Increased room nights: (vs prior year)	$210 million	8%	—	-$10 million

HGV operating KPIs by quarter

HGV operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
Members HGV Max	266K Our strong 2025 results not only demonstrate the progress we made in integrating our business but they also underscore the advantages of our business model, backed by the strength of the Hilton brand with nearly 60% recurring segment EBITDA, a highly engaged base of over 720,000 members, including 266,000 Max members with substantial embedded value and an established differentiated experience platform in our HGV Ultimate Access. Source: earnings call transcript	277K Those new buyers helped to support 29% growth in our HGV Max member base over the prior year to 277,000 members. Source: earnings call transcript	<300K Nearly 300,000 or 40% of our base are Max members today, growing 24% versus the prior year. Source: earnings call transcript	—
Tours	225K Tours were up 9% year-over-year to 225,000, driven by growth in our new buyer as well as our owner channels. Source: earnings call transcript	189K+ Tours grew 8.5% during the quarter to more than 189,000 with growth coming from both our new buyer and owner channels. Source: earnings call transcript	239K We generated 239,000 tours in the quarter, an increase of 6% versus the prior year, marking our fourth consecutive quarter of consolidated tour growth and demonstrating the continued demand across the platform. Source: earnings call transcript	—
Volume per guest (VPG)	—	<$3,800 VPG was nearly $3,800 for the quarter, declining 8% and in line with the expectations of a high single-digit decline we discussed last quarter. Source: earnings call transcript	~$3,400 VPG was down 9% to approximately $3,400 in the quarter, reflecting the factors that I mentioned earlier. Source: earnings call transcript	—
Gross receivables	$4.3B Combined gross receivables for the quarter were $4.3 billion. Source: earnings call transcript	$4.4B Combined gross receivables for the quarter were $4.4 billion. Source: earnings call transcript	$5B Combined gross receivables for the quarter were $5 billion. Source: earnings call transcript	+13.6%
Annualized default rate	9.86% Our annualized default rate for our consolidated portfolios was 9.86% for the quarter, reflecting another 24 basis points of improvement from the third quarter and marking our third straight quarter of sequential improvement in our default rate. Source: earnings call transcript	10.1% Our annualized default rate for our consolidated portfolios was 10.1% for the quarter, reflecting a slight improvement against the first quarter of the prior year. Source: earnings call transcript	—	+0.2 pt
Members Resort and club	720K+ In our resort and club business, our consolidated member count was over 720,000. Source: earnings call transcript	720K+ In our resort and club business, our consolidated member count was just over 720,000, reflecting strong new buyer additions offset by continued recaptured activity in the period. Source: earnings call transcript	722K In our resort and club business, our consolidated member count was 722,000 as we continue to add new HGV Max members balanced by additional inventory recapture. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
HGV Ultimate Access new tools	launch	recently launched

Deals & partnerships

Third party Disposition of a group of noncore assets

Closed on the agreement to dispose of noncore assets, removing them from the system. The third party stepped into future obligations as manager and developer and is actively marketing these properties for sale, with HGV participating in proceeds.

Elara Acquisition of Elara

The acquisition of Elara closed on April 30. Performance has been in line or slightly better than expectations, contributing to EBITDA and supporting the thesis of advantageous maintenance fees and solid upgrades.

Risks & headwinds

VPG moderation at Bluegreen Q2 FY26, Q3 FY26, FY26

VPG down 9% to $3,400 in Q2 FY26; full-year VPG expected to decline in low to mid-single digits; Q3 VPG expected to decline in high single digits.

Mitigation:Leadership changes, recruiting investments, and training investments implemented to improve execution.

Sales execution shortcomings Q2 FY26

Contributed to contract sales decline in Q2 FY26, most pronounced in the back half of the quarter at Orlando and Myrtle Beach locations.

Mitigation:Decisive actions taken, new leadership in place, issues identified and being rectified; expected improvement in Q3 and Q4.

Higher mix of trust transactions and new buyer sales Q2 FY26

Contributed to 9% VPG decline in Q2 FY26 due to lower average VPGs.

Mitigation:Recognized as short-term pressure but beneficial for long-term embedded value, expanding the MAX ecosystem and upgrade opportunities.

Club business expenses elevated Q2 FY26

Expense remains slightly elevated due to the timing of program-related headcount additions.

Mitigation:Expect margins to approach last year's levels as we exit the year.

Developer maintenance fees burden Q2 FY26

Responsible for a $10 million loss in the rental and ancillary business in Q2 FY26.

Mitigation:Disposition of noncore assets expected to reduce the fee burden on EBITDA by $10 million to $12 million annually on a run-rate basis.

VPG compression in Q3 Q3 FY26

Expected to continue into Q3, with VPG projected to decline in the high single digits.

Mitigation:Cost discipline, expected improvement in bad debt provision, and higher trust mix will help maintain guidance.

SG&A pressure in Q3 Q3 FY26

Expected to be a little pressured in Q3.

Mitigation:Expected to normalize in Q4.

What to watch in Q3 FY26

Sales execution improvement in Orlando and Myrtle Beach

Q3 and Q4

Current Underperformance due to leadership issues

Target Performance improvement to expected levels

Why it matters

Critical for overall contract sales and VPG recovery, especially in high-volume markets.

we expect that the performance will improve as we move through the third quarter and get back up to the level of expectation that we expect from that -- from those sales distribution centers by Q4.

Find out whether HGV delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you clarify the 400 basis point year-over-year increase in the loan loss provision and confirm the mid-teens full-year expectation?

The 17% provision in Q2 was due to higher borrowing propensity and a mix shift to higher-provisioned trust/new buyer sales, not portfolio deterioration. Delinquencies improved for Diamond and Bluegreen due to underwriting changes. Management expects the provision to improve in the second half, keeping it within the mid-teens range for the full year.

“our provision for the quarter was roughly 17%, which is definitely at the high end of our mid-teens range. But nearly actually a little bit just at a point is associated with a higher propensity to borrow that we saw with the buyers coming through the door as well as a mix to a higher percent of product being sold under the trust product.”

asked by Patrick Scholes · answered by Daniel Mathewes

2 min read 5 chapters

Detailed narrative

Sales Execution and VPG Headwinds

Hilton Grand Vacations experienced a decline in contract sales during Q2 FY26, primarily attributed to a moderation in VPG (Volume Per Guest) at Bluegreen, which was lapping a strong HGV Max launch period. Sales execution challenges, particularly in high-volume markets like Orlando and Myrtle Beach, also weighed on overall sales productivity.

Additionally, a higher mix of trust transactions and new buyer sales, which typically carry lower average VPGs, contributed to the pressure. Management emphasized that these issues were operational, not demand-related, and have implemented leadership changes and recruiting investments to drive improvement.

HGV Max and Member Engagement

The HGV Max program continues to be a significant growth driver and a central pillar of the company's strategy. The member count for HGV Max reached nearly 300,000, representing 40% of the total member base and a 24% increase year-over-year.

This growth, alongside the HGV Ultimate Access experience platform, is deepening member engagement and reinforcing the value proposition of ownership. These initiatives are crucial for expanding upgrade opportunities and recurring revenue streams, contributing to long-term embedded value.

Inventory Optimization and Capital Recycling

The company successfully executed its inventory optimization strategy by closing an agreement to dispose of a group of noncore assets on June 30. This transaction is expected to reduce the maintenance fee burden on EBITDA by $10 million to $12 million annually on a run-rate basis.

While a noncash loss of $48 million was recorded in Q2, the strategy aims to recycle capital, improve portfolio quality, reduce inventory carrying costs, and enhance long-term returns. Management indicated potential for future dispositions, though none are anticipated in 2026.

Financing Portfolio Health and Provisioning

The financing business demonstrated resilience, with combined gross receivables at $5 billion and a total allowance for bad debt at 28% of the portfolio. While the Q2 provision was 17% of owned contract sales, at the high end of the mid-teens range, this was driven by a higher financing propensity and a mix shift towards higher-provisioned trust and new buyer sales, not a deterioration in portfolio quality.

Early-stage delinquencies remained stable, and management expects the provision to normalize in the mid-teens range for the full year due to improved underwriting.

Elara Acquisition Impact

The Elara acquisition, which closed on April 30, is performing in line with or slightly better than expectations. It is projected to contribute approximately $3 million to EBITDA in Q3 and $20 million for the full year 2026. For the next fiscal year (FY27), the annualized EBITDA benefit is expected to accelerate to between $25 million and $30 million.

The acquisition supports the thesis of advantageous maintenance fees and solid upgrades, contributing to a shift from fee-for-service to owned contract sales.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.