Vail Resorts reports pass sales are up in its first-quarter earnings report
Pass sales through Dec. 2 for the current ski season increased approximately 17% in sales dollars
Vail Resorts on Monday reported that season pass sales through Dec. 2 for the current North American ski season increased approximately 17% in sales dollars (22% in units) as compared to the period in the prior year through Dec. 3, 2018.
That information came in a release from the company showing results for the first quarter of fiscal 2020.
“We are very pleased to see strong sales growth in our season pass program that exceeded our expectations,” said CEO Rob Katz in the release. “We continue to see very strong growth in our Northeast markets, which are benefiting from the first full year of pass sales with unlimited access at Stowe, Okemo and Mount Sunapee, the recent addition of Peak Resorts, and the improved impact of the expanded guest data and insight we now have in that region. Our destination markets outside of the Northeast also saw very strong growth and continue to perform well through our enhanced ability to reach destination guests with our data-driven marketing and the introduction of Epic Day Pass.”
Katz said Vail Resorts’ local markets continue to show solid overall growth, driven by favorable results amonglocal guests in the Whistler Blackcomb region, with particular strength in Seattle from the first full pass sales season with access to Stevens Pass. He also said the company is seeing strong results from its Northern California and Utah guests.
As for Colorado, Katz said, “sales in our Colorado local market were softer, with solid results in our Epic products, offset with declines in certain regional products, which was expected without Arapahoe Basin on those passes, but those declines will be more than offset by lower partnership payments.”
Katz continued, “The majority of our sales growth came from our Epic and Epic Local products where we saw solid growth in new pass holders and renewing pass holders, with less trade down to Epic Day Pass than we were expecting. Epic Day Pass was a strong success in its first year with an expanded product offering and was a significant contributor to our overall growth and exceeded our expectations, particularly in the Epic two- and three-day products. We believe this bodes very well for the long-term opportunity of Epic Day Pass, as we begin to highlight the incredible value to lower frequency guests.”
Katz pointed out that the “vast majority of Epic Day Pass sales came from new pass holders, with particular success in destination markets. Our military program delivered strong growth, with the program continuing to generate strong renewal rates while also adding new pass holders. We expect that the total number of guests on all advanced purchase passes this year will exceed 1.2 million (including all U.S., Canadian and Australian passes and Epic Day Pass), representing an incredible group of highly loyal and passionate guests.”
Among the other highlights of the earnings report:
- Net loss attributable to Vail Resorts was $106.5 million for the first fiscal quarter of 2020 compared to a net loss attributable to Vail Resorts, Inc. of $107.8 million in the same period in the prior year. Fiscal 2020 first quarter net loss included the after-tax effect of acquisition and integration related expenses of approximately $6.8 million and approximately $1 million of unfavorable foreign exchange as a result of the U.S. dollar strengthening over the prior year compared to the Australian dollar. Fiscal 2019 first quarter net loss included the after-tax effect of acquisition and integration related expenses of approximately $4.9 million.
- Resort Reported EBITDA loss was $76.7 million for the first fiscal quarter of 2020, which included $9 million of acquisition and integration related expenses and approximately $2 million of unfavorable foreign exchange as a result of the U.S. dollar strengthening over the prior year compared to the Australian dollar. In the same period in the prior year, Resort Reported EBITDA loss was $72.5 million, which included $6.6 million of acquisition and integration related expenses.
- The company reaffirmed its guidance for fiscal year 2020 of $778 million to $818 million of Resort Reported EBITDA.
Unless otherwise noted, the commentary on results for the three-month period ending Oct. 31 includes the results of the company’s recent acquisitions prospectively from each respective acquisition date — including Peak Resorts (acquired in September 2019), Falls Creek and Hotham (acquired in April 2019), Triple Peaks (acquired in September 2018) and Stevens Pass (acquired in August 2018).
“Our first fiscal quarter historically operates at a loss, given that our North American mountain resorts are generally not open for ski season operations during the period,” Katz said. “The quarter’s results are primarily driven by winter operating results from our Australian resorts and our North American resorts’ summer activities, dining, retail/rental and lodging operations, and administrative expenses.”
Katz said that the company’s Australian resorts had a strong performance during the quarter, including another record year at Perisher (on an Australian dollar basis) and very strong results in our first year of operations at Falls Creek and Hotham.
“Our strong Epic Australia Pass sales, good conditions and the addition of the Leichhardt chairlift at Perisher supported our continued momentum in the Australian market,” Katz said. “Our consolidated results from Perisher were negatively impacted by the strong U.S. dollar, which created an approximate $2 million Resort Reported EBITDA headwind from currency translation in the quarter relative to the prior year’s results.
At its North American resorts, Katz said Whistler Blackcomb’s summer business performed very well and lauded “strong performance in its world class mountain biking operations and sightseeing, supported by the addition of the new Cloudraker Skybridge. Our U.S. Epic Discovery business continues to grow and generate strong financial returns. Our lodging business experienced mixed results, with continued success from our properties at Grand Teton Lodge Company, partially offset by softer results at our Colorado properties, in part due to weaker group demand in comparison to the prior year period.”
Katz said the company’s balance sheet at the end of the quarter remains strong.
“We ended the quarter with $136.3 million of cash on hand and $1.9 billion of Net Debt. As part of the Peak Resorts acquisition, we expanded our existing term loan facility by approximately $336 million and assumed a portion of Peak Resorts’ debt. Our Net Debt was 2.8 times trailing twelve months Total Reported EBITDA, though it is important to note that this ratio only includes Peak Resorts’ results for the loss period between closing and quarter end and we expect that ratio to decline as we incorporate the full season of Peak Resorts’ results.”