Marriott Vacations Worldwide Q2 2026 Earnings: Contract Sales Rise 22%

Marriott Vacations Worldwide (NYSE: VAC) reported second-quarter 2026 revenue of $1.320 billion, up 6% from $1.246 billion, while diluted EPS rose 20% to $2.12 from $1.77. Net income attributable to common stockholders increased 11% to $77 million, and contract sales climbed 22% as volume per guest improved, although adjusted EBITDA margin narrowed.

Core earnings data

Revenue excluding cost reimbursements grew 10%, faster than total revenue, as reimbursable revenue declined to $400 million from $407 million. Adjusted EBITDA increased 6%, but its margin fell 90 basis points, indicating that higher sales did not translate into equivalent margin expansion.

GAAP diluted EPS grew faster than net income partly because diluted shares declined 8% to 38.2 million. Adjusted net income, adjusted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures.

Business and segment performance

Vacation Ownership generated the quarter’s growth, supported by higher contract sales and a 23% increase in volume per guest, or VPG. Exchange & Third-Party Management moved in the opposite direction, with lower revenue, membership, and adjusted EBITDA.

Management attributed the VPG increase to higher average transaction sizes resulting from product and operational enhancements. North American tours increased 3%, while total reported tours declined 1% because the company deliberately prioritized profitability and cash flow over tour volume in Asia-Pacific.

Exchange & Third-Party Management ended the quarter with 1.475 million active Interval International members, down 2%. Average revenue per member also fell 2% to $36.83, while the segment’s adjusted EBITDA margin declined 260 basis points to 43.3%.

Higher contract sales did not prevent margin compression

Contract sales growth lifted Vacation Ownership adjusted EBITDA, but the segment’s adjusted EBITDA margin declined 90 basis points to 28.9%. The company attributed this pressure primarily to higher marketing and sales costs and higher unsold maintenance fee expense, partly offset by lower product cost as a percentage of vacation ownership product sales.

Marketing and sales expense increased 19% to $281 million, compared with a 16% increase in vacation ownership product revenue to $430 million. Development profit rose 16% to $106 million, but its margin was nearly unchanged at 24.6%, versus 24.7% a year earlier.

Pressure was also visible outside development activities. Rental profit declined 7% to $33 million, with margin falling 290 basis points to 19.4%. Financing profit decreased 5% to $50 million, while its margin contracted 450 basis points to 54.3%. These declines partly offset improved management and exchange profit.

Liquidity, debt, and inventory

Marriott Vacations Worldwide ended the quarter with $928 million of liquidity, including $211 million in cash and cash equivalents and $650 million of available revolving credit capacity. The company had $3.1 billion of corporate debt and $2.4 billion of non-recourse debt associated with securitized vacation ownership notes receivable.

Net corporate leverage declined to 4.0 times from 4.2 times at the end of the first quarter. Quarter-end inventory totaled $902 million, including $229 million classified within property and equipment.

Full-year 2026 guidance

The company raised all five principal full-year ranges presented in its outlook, including contract sales, adjusted EBITDA, adjusted EPS, and adjusted free cash flow. Management said the revision reflected its focus on continued contract sales growth and higher adjusted EBITDA.

The earnings and cash-flow guidance is presented on a non-GAAP basis. It excludes certain asset sales, foreign-currency changes, restructuring, litigation, modernization, transaction and integration costs, and impairments that the company said could not be forecast with sufficient accuracy and could be material to GAAP results.

Risks investors should watch

• Sales growth relied on transaction value rather than tour growth. Contract sales increased 22% as VPG rose 23%, while total tours declined 1%. A change in average transaction size would therefore have a meaningful effect on sales momentum.
• Cost growth is pressuring margins. Marketing and sales expense increased faster than vacation ownership product revenue, while unsold maintenance fees also weighed on segment profitability.
• The exchange business is contracting. Active members, average revenue per member, revenue, adjusted EBITDA, and adjusted EBITDA margin all declined from the prior year.
• Leverage remains material. Net corporate leverage improved sequentially, but the company still carried $3.1 billion of corporate debt in addition to $2.4 billion of non-recourse debt.

Summary

Marriott Vacations Worldwide’s second-quarter results were led by higher transaction sizes and 22% contract sales growth, which supported increases in revenue, net income, and adjusted EBITDA. The main counterweight was margin pressure from marketing, maintenance, rental, and financing costs. Investors’ next focus is whether the company can deliver its raised full-year outlook while sustaining VPG growth, controlling sales costs, and continuing to reduce leverage.