Vail Resorts (MTN) Misses Q1 EPS by 28c, Revenues Miss

Vail Resorts (NYSE: MTN) reported Q1 EPS of ($3.82), $0.28 worse than the analyst estimate of ($3.54). Revenue for the quarter came in at $131.79 million versus the consensus estimate of $163.01 million.

Highlights

• Net loss attributable to Vail Resorts, Inc. was $153.8 million for the first fiscal quarter of 2021, a decrease of 44.4% compared to the first fiscal quarter of 2020, primarily as a result of the negative impacts of COVID-19.
• Resort Reported EBITDA loss was $94.8 million for the first fiscal quarter of 2021, compared to a Resort Reported EBITDA loss of $76.7 million for the first fiscal quarter of 2020, primarily as a result of the negative impacts of COVID-19 and partially offset by disciplined cost management and $15.4 million of lift revenue recognized in the first fiscal quarter of 2021 associated with the expiration of the credit offers to 2019/2020 pass product holders.
• Season pass sales through December 6, 2020 for the upcoming 2020/2021 North American ski season increased approximately 20% in units and were flat in sales dollars as compared to the period in the prior year through December 8, 2019, with sales dollars for this year reduced by the value of the redeemed credits provided to 2019/2020 North American pass holders. Without deducting for the value of the redeemed credits, sales dollars increased approximately 19% compared to the prior year. Pass sales are adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.78 between the Canadian dollar and U.S. dollar in both periods for Whistler Blackcomb pass sales.
• We continue to maintain significant liquidity with $614 million of cash on hand as of November 30, 2020 and $587 million of availability under our U.S. and Whistler Blackcomb revolving credit facilities.

Commenting on the Company's fiscal 2021 first quarter results, Rob Katz, Chief Executive Officer, said, "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. 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. Our results for the first quarter continued to be negatively impacted by COVID-19. In Australia, Hotham and Falls Creek remained closed for the entire quarter following the issuance of stay at home orders by the Victorian government on July 8, 2020, resulting in a significant decline in revenue compared to the prior year period. At Perisher, visitation trends improved relative to July 2020 as available terrain increased, but results continued to be negatively impacted by COVID-19 and related capacity constraints. In North America, our U.S. resorts experienced improved demand from leisure travelers throughout the quarter relative to the fourth quarter of fiscal 2020, but summer visitation remained well below historical levels. At Whistler Blackcomb, demand remained significantly below prior year levels due in part to travel restrictions, with the Canadian border remaining closed the entire quarter to international guests, including guests from the U.S.

"We continued to maintain disciplined and rigorous cost controls throughout the quarter to partially mitigate the reduced revenue levels. Resort net revenue for the first quarter declined $132.1 million compared to the prior year while Resort Reported EBITDA declined only $18.1 million over the same time period, reflecting cost reductions driven by a combination of reduced seasonal labor and expenses as well as significant overhead cost saving actions. First quarter Resort net revenue includes the recognition of approximately $15.4 million of lift revenue related to the September 17, 2020 expiration of unredeemed credits offered to 2019/2020 North American pass holders (the "Credit Offer"), for which we deferred a total of $120.9 million of revenue from our prior year pass sales and which would have otherwise been recognized during fiscal 2020. We expect to recognize the remainder of the deferred revenue associated with the Credit Offer as lift revenue primarily during the second and third quarters of fiscal 2021."

Commenting on the Company's liquidity, Katz stated, "Our total cash and revolver availability as of November 30, 2020 was approximately $1.2 billion, with $614 million of cash on hand, $419 million of U.S. revolver availability under the Vail Holdings Credit Agreement and $169 million of revolver availability under the Whistler Credit Agreement. As of October 31, 2020, our Net Debt was 4.1 times trailing twelve months Total Reported EBITDA. We continue to expect to have sufficient liquidity to fund operations through at least the 2021/2022 ski season, even in the event of extended resort shutdowns."

Moving on to season pass results, Katz said, "As we approach the end of our selling period, season pass sales for the North American ski season increased approximately 20% in units and were flat in sales dollars through December 6, 2020 compared to the prior year period ended December 8, 2019, with sales dollars for this year reduced by the value of the redeemed credits provided to 2019/2020 North American pass holders. Without deducting for the value of the redeemed credits, sales dollars increased approximately 19% compared to the prior year. Pass sales results are adjusted to eliminate the impact of foreign currency by applying an exchange rate of $0.78 between the Canadian dollar and U.S. dollar in both periods for Whistler Blackcomb pass sales. Pass sales are reduced by the amount of Epic Coverage refund requests processed through December 6, 2020, but do not include any estimated reductions for future Epic Coverage refunds.

"We are very pleased with the growth in our season pass program, particularly given the challenging circumstances surrounding the impacts of COVID-19. We expect that the total number of guests on all advanced purchase passes this year will exceed 1.4 million including all passes for our North American and Australian resorts, demonstrating the significant loyalty of our guest base and the strong demand for our mountain resorts. Since September, pass sales exceeded our expectations primarily driven by continued strong demand from destination guests and significant growth in pass sales to guests who were not previously in our database, particularly in lower frequency Epic Day Pass products."

Katz continued, "For the full pass sales season, we saw very strong unit growth broadly across our Destination markets. We also saw solid unit growth in our Utah, Northern California and Whistler markets and in Colorado saw comparable performance to last year. The primary driver of our unit growth was from renewing pass holders given the credit incentive offered for renewing guests, but we also saw strong growth in new pass holders, with particularly strong growth in pass sales to guests who were not previously in our guest database. We saw strong growth in our Epic Pass and Epic Local Pass products and very strong growth in our Epic Day Pass products, demonstrating both the guest loyalty we have created in our core programs and the success of our long-term strategy to move new and less frequent guests into our pass products. While we expect that some of our Epic Day Pass growth may be a result of the circumstances surrounding this season, we also believe that the growth from new guests into our pass products this year will accelerate our ability to move guests into advanced commitment in the future. The success of our total program this year has been supported by the value proposition of our pass products and the steps taken to address the current environment, including our pass holder credits, extended deadlines, reservation system, new Epic Coverage program included with the purchase of every pass product for no additional charge, continued data-driven marketing efforts, inclusion of Peak Resorts in our network, and a second year offering our broader Epic Day Pass products."

Katz continued, "The safety of our guests, employees and communities continues to be our top priority. As previously mentioned, we implemented operating procedures that we believe will enable us to operate safely across our 34 North American ski resorts throughout the season, including the implementation of a reservation system for our guests. Currently, the reservation system, which opened to pass holders on November 6, 2020 and lift ticket purchasers on December 8, 2020, continues to have available capacity for almost all days during the core season across our resorts. The reservation systems and our contingency planning around our operations has positioned us to react quickly to the changing circumstances surrounding COVID-19 restrictions across our resort jurisdictions, which we expect will continue throughout the season."

For earnings history and earnings-related data on Vail Resorts (MTN) click here.

You May Also Be Interested In

• Alphabet (GOOGL) soars 16% on Q1 results beat, first-ever dividend
• Macatawa Bank (MCBC) Misses Q1 EPS by 1c
• L3Harris Technologies (LHX) Tops Q1 EPS by 15c; raises guidance