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Jul 31, 2023
Vail Resorts Q4 2023 Earnings Report
Reported fiscal year 2023 fourth quarter and full year results and provided fiscal 2024 outlook.
Key Takeaways
Vail Resorts reported a decrease in fourth-quarter performance driven by investments in employees and weather-related challenges in Australia. However, the company is pleased with the overall results for the year, with strong growth in 2022/2023 North American ski season visitation and spending compared to the prior year, further supported by the stability created by advance commitment products.
Pass product sales through September 22, 2023, for the upcoming 2023/2024 North American ski season increased approximately 7% in units and approximately 11% in sales dollars as compared to the period in the prior year through September 23, 2022.
The Company declared a quarterly cash dividend of $2.06 per share of Vail Resorts’ common stock that will be payable on October 26, 2023 to shareholders of record as of October 10, 2023 and repurchased approximately 0.4 million shares during the quarter at an average price of $247 for a total of $100 million.
The fourth quarter declined from the prior year, primarily driven by the Company’s fiscal 2023 investments in employees, as well as a below average snowfall and snowmaking temperatures that limited terrain availability during the Australian winter season.
The Company expects net income attributable to Vail Resorts, Inc. to be between $316 million and $394 million and Resort Reported EBITDA to be between $912 million and $968 million for fiscal year 2024.
Vail Resorts
Vail Resorts
Vail Resorts Revenue by Segment
Revenue by Segment
Real Estate Revenue
CapyFin.com Forward Guidance
The Company expects meaningful growth for fiscal 2024 relative to fiscal 2023 with strong Resort EBITDA margin. Our guidance for net income attributable to Vail Resorts, Inc. is estimated to be between $316 million and $394 million for fiscal 2024. We estimate Resort Reported EBITDA for fiscal 2024 will be between $912 million and $968 million.
Positive Outlook
- Advance commitment continues to be the foundation of our strategy, shifting guests from short term refundable lift ticket purchases to a nonrefundable commitment before the season starts, in exchange for greater value.
- The Company achieved strong loyalty among its pass holders, with particularly strong pass sales growth from renewing pass holders, while also growing sales among new pass holders.
- The Company successfully grew units across destination, international and local geographies, with the strongest unit growth in destination markets, including in the Northeast, and across all major pass product segments, with the strongest product growth in regional pass products and Epic Day Pass products as lower frequency guests and local Northeast guests continue to be attracted by the strong value proposition of these products.
- The business also achieved positive growth in the Midwest and Mid-Atlantic, which after challenging conditions last season, highlights the stability of our advance commitment program, loyalty of our guests, and significant opportunity to drive pass penetration in the East.
- The guidance assumes a continuation of the current economic environment and normal weather conditions for the 2023/2024 North American and European ski season and the 2024 Australian ski season.
Challenges Ahead
- Fiscal 2024 guidance includes an expectation that the first quarter of fiscal 2024 will generate net loss attributable to Vail Resorts, Inc. between $191 million and $168 million and Resort Reported EBITDA between negative $154 million and negative $140 million.
- At the midpoint of the guidance range, first quarter fiscal 2024 Resort Reported EBITDA assumes a negative impact of approximately $46 million compared to the first quarter of fiscal 2023 excluding exchange rate impacts, primarily driven by cost inflation, including a $7 million impact of our fiscal 2023 employee investment which went into effect in October 2022, lower results from our Australian resorts from the continuation of the weather related challenges that impacted terrain in the fourth quarter of fiscal 2023, and lower results from North American summer operations from the continuation of the lower demand for destination mountain travel experienced in the prior fiscal quarter.
- Relative to fiscal 2023, fiscal 2024 full year guidance also reflects a negative Resort Reported EBITDA impact of approximately $3 million as a result of the Company’s fiscal 2023 exit of its retail and rental locations in Telluride and Aspen.
- The guidance assumes an exchange rate of $0.74 between the Canadian Dollar and U.S. Dollar related to the operations of Whistler Blackcomb in Canada, an exchange rate of $0.64 between the Australian Dollar and U.S. Dollar related to the operations of Perisher, Falls Creek and Hotham in Australia, and an exchange rate of $1.10 between the Swiss Franc and U.S. Dollar related to the operations of Andermatt-Sedrun in Switzerland.
- The current fiscal 2024 exchange rate assumptions result in an expected $5 million negative impact relative to fiscal 2023 results and an expected $10 million negative impact relative to our original fiscal 2023 guidance provided in September 2022.