Vail Resorts (MTN) will report fourth quarter results
(ending July) tomorrow morning, and management will subsequently host a call at
Vail boasts itself as the premier mountain resort company in the world. The company has been consolidating the ski resort industry.
Vail Resorts' mountain resorts include: Vail, Beaver Creek, Breckenridge, and Keystone in Colorado; Park City in Utah; Heavenly, Northstar, and Kirkwood in the Lake Tahoe area of California and Nevada; Perisher in Australia; Whistler Blackcomb in Canada; Afton Alps in Minnesota; Stowe Mountain in Vermont; Mt. Brighton in Michigan; and Wilmot Mountain in Wisconsin.
Much of the portfolio has been acquired by the company in recent years, including Whistler Blackcomb, added in autumn of 2016, and Stowe Mountain, which saw its acquisition close in summer 2017. In June, the company agreed to purchase Triple Peaks, LLC, the parent company of Okemo Mountain Resort in Vermont, Mount Sunapee Resort in New Hampshire, and Crested Butte Mountain Resort in Colorado, while the company separately also acquired Stevens Pass Resort in the Cascade Range in Washington State.
The company's impressive portfolio of ski reports drives sales of its Epic Pass, a popular season pass that allows skiers “unlimited, unrestricted” access to any of the company's mountains all year. It also offers additional, limited access at various allied ski sites in diverse locations, including in the European Alps, the Canadian Rockies, and Japan’s Hakuba Valley.
Vail is expected to report a wider fourth quarter net loss year/year with revenue up ~1%. The company has exceeded estimates on the top and bottom line two quarters in a row.
The fourth quarter is seasonally the company's slowest, so guidance for fiscal 2019 and an update to season pass sales for next season is likely more important to investors than this quarter’s marks.
In March, the company lowered fiscal 2018 EBITDA guidance due to unfavorable ski conditions and strength in the U.S. dollar. Conditions across the western U.S. were challenging last winter, with snowfall in the Rocky Mountains at the lowest levels recorded in over 30 years while Tahoe was more than 50% below the 20-year average as of January.
Still, ticket revenue was up 7%, despite a 3% decline in visitation, due to strong season pass sales.
Last quarter, the company reaffirmed fiscal 2018 Resort (comprised of the Mountain and Lodging segments) earnings before interest, tax, depreciation, and amortization (EBITDA) guidance but raised total reported EBITDA guidance to $612-624 mln from $599-625 mln due to the Real Estate segment. Estimates represent growth of 4% year/year at the midpoint.
EBITDA is expected to grow 20% to $744 mln with revenue up 14% in fiscal 2019.
The other key metric to watch tomorrow will be an update on season pass sales for the 2018/2019 ski season.
Last quarter, Vail reported season pass sales through May for the upcoming 2018/2019 North American ski season increased ~12% in units and ~19% in dollars.
Investors likely regard Vail as more of a long-term asset play rather than an earnings story, at least for now.
Vail has a $12 bln market value and trades with an enterprise value 18x EBITDA estimates for fiscal 2019.
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