Vail Resorts Reports Fiscal 2024 Third Quarter Results, Provides Updated Fiscal 2024 Guidance, Provides Early Season Pass Sales Results

Vail Resorts, Inc. (NYSE: MTN) today reported results for the third quarter of fiscal 2024 ended April 30, 2024, reported early season pass sales, updated fiscal 2024 guidance, and announced share repurchases completed during the quarter.

Highlights

• Net income attributable to Vail Resorts, Inc. was $362.0 million for the third fiscal quarter of 2024 compared to net income attributable to Vail Resorts, Inc. of $325.0 million in the same period in the prior year.
• Resort Reported EBITDA was $654.4 million for the third quarter of fiscal 2024, which included $1.3 million of acquisition related expenses. In the same period in the prior year, Resort Reported EBITDA was $623.3 million, which included $0.1 million of acquisition and integration related expenses.
• The Company updated its fiscal 2024 guidance range. On a comparable basis with its prior guidance issued on March 11, 2024, Resort Reported EBITDA is now expected to be between $833 million and $851 million. With the closing of the acquisition of Crans-Montana Mountain Resort ("Crans-Montana"), the Company now expects net income attributable to Vail Resorts, Inc. to be between $224 million and $256 million and Resort Reported EBITDA to be between $825 million and $843 million.
• Pass product sales through May 28, 2024 for the upcoming 2024/2025 North American ski season decreased approximately 5% in units and increased approximately 1% in sales dollars as compared to the prior year period through May 30, 2023. Pass product sales are adjusted to eliminate the impact of changes in foreign currency exchange rates by applying current U.S. dollar exchange rates to both current period and prior period sales for Whistler Blackcomb.
• The Company declared a quarterly cash dividend of $2.22 per share of Vail Resorts' common stock that will be payable on July 10, 2024 to shareholders of record as of June 25, 2024 and repurchased approximately 0.3 million shares during the quarter at an average price of approximately $217 for a total of approximately $75 million. This amount brings the Company's total fiscal year-to-date repurchases to $125 million for a total of 0.6 million shares.
• On May 2, 2024, the Company closed on its acquisition of Crans-Montana Mountain Resort in Switzerland, the Company's second ski resort in Europe.
• On May 8, 2024, the Company completed an offering of $600 million aggregate principal amount of 6.50% Senior Notes due 2032. The Company used the net proceeds from the issuance of these notes to fund the redemption of the entire amount of $600 million 6.25% Senior Notes due 2025 on May 15, 2024 at par. Additionally, the Company completed an amendment of its Vail Holdings Credit Agreement to extend the maturity of the $969 million term loan and $500 million revolver from 2026 to 2029.

Commenting on the Company's fiscal 2024 third quarter results, Kirsten Lynch, Chief Executive Officer, said, "Given the unfavorable conditions across our North American resorts for a large portion of the 2023/2024 North American ski season, we were pleased to see improved results in March and April, with visitation across our western North American resorts in particular benefiting from improved conditions. While pass product visitation returned as expected, as we communicated in April, lift ticket visitation did not return to typical historical guest behavior for the spring, primarily at Whistler Blackcomb, which was down significantly relative to the prior year period. Despite these challenges, the Company grew resort net revenue and Resort Reported EBITDA to record levels in the third quarter, supported by the stability created from our advance commitment strategy, operations executional excellence, and continued strong growth in ancillary spending per skier visit across our ski school, dining, and rental businesses at our resorts.

"Our results throughout the 2023/2024 North American ski season highlight both the stability provided by our season pass program and the investments we have made in our resorts and employees. The winter season included significant weather-related challenges, with approximately 28% lower snowfall for the full winter season across our western North American resorts compared to the same period in the prior year and limited natural snow and variable temperatures at our Eastern U.S. resorts (comprising the Midwest, Mid-Atlantic, and Northeast). For the 2023/2024 North American and European ski season, total skier visits declined 7.7% as compared to the prior year period, which we believe was driven by a combination of unfavorable conditions and broader industry normalization post-COVID following record visitation in the U.S. during the 2022/2023 ski season. Skier visitation from lift ticket guests was particularly impacted, declining 17% compared to the prior year period. Despite the decline in visitation, ancillary spending was strong across our ski school, dining, and rental businesses at our resorts. Resort net revenue for the second and third quarter combined period increased 1% and Resort Reported EBITDA increased 6% over the prior year, supported by our advance commitment strategy, strong growth in guest ancillary spending per visit, and continued cost discipline."

Regarding the outlook for fiscal 2024, Lynch said, "While late season results improved, we now expect Resort Reported EBITDA to be between $833 million and $851 million on a comparable basis with our prior guidance issued March 11, 2024, which included $4 million of acquisition related expenses specific to Crans-Montana, but excluded closing costs, operating results, and integration expenses associated with Crans-Montana. The reduction relative to the guidance provided on March 11, 2024 is primarily from lift ticket visitation not returning to typical historical spring behavior as expected in the March and April period, primarily at Whistler Blackcomb, along with lowered expectations for the fourth quarter of $9 million primarily related to the demand outlook for our Australian resorts. In addition, with the closing of the acquisition, we now expect Crans-Montana to contribute negative $12 million of Resort Reported EBITDA for fiscal 2024, including negative $9 million from acquisition, closing, and integration expenses and negative $3 million from operating results in the fourth quarter. Including the full impact of Crans-Montana, the Company now expects net income attributable to Vail Resorts, Inc. to be between $224 million and $256 million and Resort Reported EBITDA to be between $825 million and $843 million."

Operating Results

A more complete discussion of our operating results can be found within the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Company's Form 10-Q for the third fiscal quarter ended April 30, 2024, which was filed today with the Securities and Exchange Commission. The following are segment highlights:

Mountain Segment

• Total lift revenue increased $35.6 million, or 5.0% compared to the same period in the prior year, to $745.7 million for the three months ended April 30, 2024, primarily due to an increase in pass product revenue of 13.7%, which was primarily driven by an increase in pass product sales for the 2023/2024 North American ski season, partially offset by a decrease in non-pass product lift revenue of 5.7%. The decrease in non-pass product lift revenue was driven by a decrease in skier visitation across all regions, which was impacted by challenging conditions at our North American resorts for a large portion of the season and broader industry normalization post-COVID following record visitation in the U.S. during the 2022/2023 ski season, partially offset by an increase in non-pass Effective Ticket Price ("ETP") of 9.9%.
• Ski school revenue increased $16.1 million, or 11.1% and dining revenue increased $7.8 million, or 7.7%, which each benefited from an increase in guest spending per visit across our North American resorts.
• Retail/rental revenue decreased $11.7 million, or 8.7%, for which retail sales decreased $6.6 million, or 10.0%, and rental sales decreased $5.1 million, or 7.5%. The decrease in both retail and rental revenue was primarily driven by our exit of certain leased store operations which we operated in the prior year, which resulted in a reduction in revenue of approximately $7.8 million, as well as a decrease in skier visitation which impacted sales at our on-mountain retail outlets.
• Operating expense increased $20.7 million, or 3.8%, which was primarily attributable to an increase in general and administrative expenses and increased variable expenses associated with increased revenue.
• Mountain Reported EBITDA increased $31.7 million, or 5.2%, for the third quarter compared to the same period in the prior year, which includes $5.4 million of stock based compensation expense for the three months ended April 30, 2024 compared to $4.9 million in the same period in the prior year.

Lodging Segment

• Lodging segment net revenue (excluding payroll cost reimbursements) for the three months ended April 30, 2024 decreased $6.0 million, or 6.8%, as compared to the same period in the prior year, primarily due to a decrease in revenue from managed condominium rooms of $3.0 million or 7.9%, as a result of a reduction in our inventory of available managed condominium rooms proximate to our mountain resorts, as well as decreased demand, including the impact of decreased skier visitation driven by challenging weather conditions at our North American resorts for a large portion of the season compared to the prior year. Other revenue also decreased $2.2 million or 17.4%, primarily due to decreases in ancillary and other revenues.
• Operating expense (excluding payroll cost reimbursements) decreased $5.4 million, or 7.5%, which was primarily attributable to lower staffing required to support a reduced inventory of managed condominium rooms and a reduction in labor hours as a result of decreased demand.
• Lodging Reported EBITDA for the three months ended April 30, 2024 decreased $0.6 million, or 3.7%, for the third quarter compared to the same period in the prior year, which includes $0.7 million of stock-based compensation expense for the three months ended April 30, 2024 compared to $0.9 million in the same period in the prior year.

Resort - Combination of Mountain and Lodging Segments

• Resort net revenue increased $44.8 million, or 3.6%, compared to the same period in the prior year, to $1,283.1 million for the three months ended April 30, 2024.
• Resort Reported EBITDA was $654.4 million for the three months ended April 30, 2024, an increase of $31.0 million, or 5.0%, compared to the same period in the prior year.

Total Performance

• Total net revenue increased $44.9 million, or 3.6%, to $1,283.3 million for the three months ended April 30, 2024 as compared to the same period in the prior year.
• Net income attributable to Vail Resorts, Inc. was $362.0 million, or $9.54 per diluted share, for the third quarter of fiscal 2024 compared to the net income attributable to Vail Resorts, Inc. of $325.0 million, or $8.18 per diluted share, in the third quarter of the prior year. Net income for the third quarter of fiscal 2024 includes approximately $37 million of pre-tax expense associated with a change in the estimated fair value of the contingent consideration liability related to our Park City resort lease, compared to approximately $46 million of pre-tax expense in the third quarter of the prior year. Additionally, net income for the third quarter of fiscal 2024 includes the after-tax effect of acquisition related expenses of approximately $1.0 million, compared to $0.1 million of acquisition and integration related expenses in the third quarter of the prior year.