Vail Resorts reports a rough spring, summer optimism |

Vail Resorts reports a rough spring, summer optimism

Company reports a 47.8% decline in net income from same period in 2019

Vail Resorts Thursday announced its third quarter results. The company's net income declined 47.8% during the quarter including February, March and April.
Chris Dillmann |
A rough ride
  • $298.05: Vail Resorts peak stock price, set Aug. 27, 2018.
  • $131.73: Vail Resorts stock price on April 3, a five-year low.
  • $206.97: Vail Resorts stock price at the June 4 market close.

Like just about every other person and entity, Vail Resorts has had a tough spring.

Vail Resorts on Thursday afternoon released its earnings report for the third quarter of its fiscal year, February through the end of April. That’s usually the company’s most profitable quarter, but operations were short-circuited by the worldwide outbreak of the COVID-19 virus and the March 15 shutdown of all Vail Resorts’ North American resorts.

The company took a 47.8% decline in net income during the quarter compared to the previous year. Total net revenue declined 27.5%.

In a statement, Vail Resorts CEO Rob Katz said that the decline in third-quarter revenue began in the first two weeks of March, stating that, “We experienced a negative change in performance that we believe was due to the impact of COVID-19 on traveler behavior.”

The statement adds that the company actually expected a steeper drop in net revenue. The statement notes that the company expected a third-quarter decline of between $180 million and $200 million in resort reported EBITDA (earnings before interest, taxes depreciation and amortization). Results weren’t that bad, to the tune of about $40 million, the report states.

While Vail Resorts suffered a bad quarter, Katz said he’s optimistic about the future in a Thursday earnings call.

Katz noted that the resorts expect to be open for summer operations and the Australian ski season by late June or early July.

‘Tremendous passion’

And, speaking to analysts on the conference call, Katz said there are indicators of a “tremendous passion and enthusiasm to get back.”

For now, though, Katz said the company is counting in large part on drive-up visitation.

“Consumer sentiment seems to be the shorter the distance the better,” Katz said.

Katz added that the company believes it can see good results from future pass sales. An April 27 announcement offered credits for a 2020-21 pass to those who bought passes for the 2019-20 season. Those credits can be up to 80% for season pass holders who didn’t use their passes this past season.

The company also introduced Epic Coverage to replace third-party pass insurance.

Katz told analysts that while the travel and recreation industry, in general, is in a “constantly moving environment,” Vail Resorts is focused on the guest experience in an era of social distancing.

Katz noted that Vail Resorts’ operations in general put people outside on large mountains. But, he added, the company is paying attention to “pinch points” including lifts and restaurants.

Analyst Sean Kelley of Bank of America asked Katz about the company moving its pass-sale deadlines.

What about passes?

Katz noted that the company does a “huge percentage” of business based on deadlines. While it’s too early to see trends, Katz reiterated his optimism that skier and riders want to ski and ride.

“Anecdotally, we’re getting good response from many passholders,” Katz said. “People understand this is a tough moment.”

And, while there may be fewer people on the mountains this winter, Katz said those who do come can expect “the full mountain experience.”

That mountain experience starts this summer at the company’s resorts in Australia. Katz said the experience at those resorts will help the company plan for winter in North America.

Analyst Chris Waronka of Deutsche Bank asked how the current labor and housing environment might affect the company’s operations this winter.

Katz acknowledged that there could be “eased pressure” on local labor and housing markets, which could present a “small opportunity” for the company.

“We’ll use this (opportunity) to make sure we stay out ahead,” Katz said. “We probably will have an easier time fully staffing.”

That staffing will include the company’s hourly full-time employees, all of whom were furloughed shortly after the March 15 resort shutdown.

“We have a goal of getting those employees back to work,” he said.

Vail Daily Business Editor Scott Miller can be reached at

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