It has been about a month since the last earnings report for Vail Resorts (MTN). Shares have lost about 9.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Vail Resorts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Vail Resorts reported first-quarter fiscal 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. Revenues increased on a year-over-year basis, but the adjusted loss widened from the prior-year quarter’s levels.
During the quarter, its Resort reported EBITDA remained steady compared with the previous year, driven by growth in North America’s summer business from increased activities spending and lodging. However, this growth was partially offset by a decline in EBITDA from its Australia’s resorts, due to record low snowfall, lower demand and cost inflation.
As the 2024/2025 ski season approaches, the company is encouraged by its strong base of committed guests, ensuring stability. The company has raised its fiscal 2025 guidance for reported EBITDA and net income (attributable to Vail Resorts). This update includes a decrease in expected interest expense of around $2 million, assuming interest rates remain stable for the remainder of fiscal 2025. The company also anticipates normal weather conditions for the 2024/2025 North America and Europe’s ski seasons, as well as the 2025 ski season in Australia.
MTN’s Q1 Earnings & Revenues
In the quarter under review, the company reported a loss of $4.61 per share, narrower than the Zacks Consensus Estimate of a loss of $5.14. In the prior-year quarter, the company had registered a loss of $4.60 per share.
Quarterly net revenues amounted to $260.3 million, surpassing the consensus mark of $249.4 million. The top line increased 0.7% on a year-over-year basis.
Segment Results of MTN
Vail Resorts reports through two segments — Mountain and Lodging.
Mountain: This segment generated net revenues of $173.3 million in the quarter under review, up 0.5% year over year. In the fiscal quarter, revenues from dining inched up 14.1% year over year to $20.6 million. Revenues from retail/rental declined 11.8% year over year to $29.5 million. That said, revenues from ski school and lift fell 4.7% and 10.9%, respectively, year over year.
The segment’s reported EBITDA loss amounted to $144.1 million in the fiscal first quarter compared with $139.5 million reported in the year-ago quarter. Operating expenses totaled $319.5 million, up 2.1% year over year.
Lodging: Total net revenues in the reported quarter were $86.9 million, up 6.2% year over year.
In the fiscal quarter, the segment’s EBITDA was $4.4 million against the loss of $0.2 million reported in the year-ago quarter. Operating expenses in the segment increased 0.6% year over year to $82.6 million.
Operating Results of MTN
Vail Resorts reported a consolidated EBITDA loss of $124.6 million in the fiscal quarter, down from $134.4 million reported in the year-ago quarter. Operating expenses totaled $403.6 million compared with $400.1 million reported in the year-ago quarter.
MTN’s Balance Sheet
Cash and cash equivalents as of Oct. 31, 2024, totaled $403.8 million compared with $322.8 million reported at fiscal 2024 end.
Net long-term debt amounted to $2.71 billion at the end of the fiscal first quarter compared with $2.72 billion as of July 31, 2024.
As of Oct. 31, the company had total cash and revolver availability of approximately $1,024 million. This includes $404 million cash in hand, $407 million of U.S. revolver availability under the Vail Holdings Credit Agreement and $213 million of revolver availability under the Whistler Credit Agreement.
Other Updates of MTN
Season to date (through Dec. 3, 2024), the company stated that Pass product sales dropped approximately 2% in units, but increased nearly 4% in sales dollars compared with the prior-year period’s (through Dec.4, 2023) levels for the 2024/2025 North America’s ski season. Although the company stated benefits from an 8% price increase (relative to the 2022/2023 season), it was partially offset by unit growth among lower-priced Epic Day Pass products.
The Epic Day Pass saw growth in units, driven by strong performance in renewing pass holders. Vail Resorts expects around 2.3 million guests to commit to its 42 resorts across North America, Australia and Europe through non-refundable advance products. These commitments are expected to generate more than $975 million in revenues and represent about 75% of all skier visits, excluding complimentary visits.
MTN Raised Fiscal 2025 Guidance
In fiscal 2025, net income (attributable to Vail Resorts) is now estimated in the range of $240-$316 million, up from the prior expected band of $224-$300 million. The estimated figure indicates growth from $230.4 million reported in fiscal 2024.
Total reported EBITDA is now expected between $844 million and $906 million, up from the prior expected range of $827-$889 million. The estimated figure indicates growth from $826.6 million reported in fiscal 2024.
Resorts reported EBITDA is still expected in the range of $838-$894 million. Resorts reported EBITDA margin is anticipated to be nearly between 28.6% and 29.1%, using the midpoint of the guidance.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Vail Resorts has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Vail Resorts has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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