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Vail Resorts (MTN) Q3 Earnings Lag Estimates, Revenues Top

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Vail Resorts, Inc. (MTN - Free Report) reported mixed third-quarter fiscal 2022 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. However, the top and the bottom line increased on a year-over-year basis.

Following the announcement shares of the company gained 4.8% during after-hours trading session on Jun 9. Positive investor sentiments were witnessed as the company reported stability in its operations despite of headwinds arising from weather, staffing challenges and COVID-19 impacts.

Kirsten Lynch, chief executive officer, Vail Resorts, stated, "We are pleased with our overall results for the quarter and for the 2021/2022 North American ski season. As expected, results for the quarter significantly outperformed results from the prior year primarily due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior year period.”

Earnings & Revenues

In the quarter under review, the company reported earnings per share (EPS) of $9.16 per share, missing the Zacks Consensus Estimate of $9.17. The metric increased from $6.72 reported in the prior-year quarter.

Vail Resorts, Inc. Price, Consensus and EPS Surprise

 

Vail Resorts, Inc. Price, Consensus and EPS Surprise

Vail Resorts, Inc. price-consensus-eps-surprise-chart | Vail Resorts, Inc. Quote

 

Quarterly revenues amounted to $1,176.7 million, beating the consensus mark of $1,158 million by 1.7%. The top line rose 32.3% on a year-over-year basis. The upside was primarily driven by strong destination visitation along with solid lift ticket sales at our Colorado and Utah resorts.

Segment Results

Vail Resorts reports through two segments — Mountain and Lodging.

The Mountain segment generated revenues of $1,084.6 million in the quarter under review, up 30.7% year over year. The upside was mainly driven by fewer COVID-19-related limitations and restrictions compared with the prior-year period’s levels.

During the quarter, revenues from dining and retail/rental rose 73.6% and 38.6%, respectively, year over year. Revenues from the lift and Ski school increased 23.7% and 50.4% year over year to $714.7 million and $120.9 million, respectively.

The segment’s EBITDA amounted to $596 million in the fiscal third quarter compared with $456.9 million reported in the prior-year quarter. Operating expenses in the Mountain segment totaled $489 million, up 30.7% year over year.

Lodging net revenues (excluding payroll cost reimbursements) in the reported quarter were $87.2 million, up 54.6% year over year, primarily due to robust dining revenues. During the quarter, the segment’s EBITDA came in at $14.5 million compared with $5.3 million reported in the year-ago quarter.

During the quarter, operating expenses in the Lodging segment increased 45.9% year over year to $77.4 million.

Operating Results

Vail Resorts reported adjusted EBITDA of $609.2 million in the quarter compared with $461.2 million reported in the prior-year quarter. Total segment operating expenses totaled $568 million, up 32.4% year over year.

Balance Sheet

Cash and cash equivalents as of Apr 30, 2022, totaled $1,401.2 million, up from $1,344.7 million in the year-ago period.

Net long-term debt amounted to $2,687.5 million at the end of the quarter, up from $2,739.9 million at the end of the prior-year quarter.

As of Apr 30, 2022, the company had total cash and revolver availability of approximately $2 billion. This includes $1.4-billion cash in hand, $417 million of U.S. revolver availability under the Vail Holdings Credit Agreement and $212 million of revolver availability under the Whistler Credit Agreement.

Meanwhile, the company declared a cash dividend of $1.91 per share. The dividend will be paid out on Jul 12, 2022, to shareholders on record as of Jun 27, 2022.

Other Information

The company reported solid season pass sales for the upcoming 2022/2023 North American ski season. Season-to-date (through May 31, 2022), the company stated that Pass product sales had increased approximately 9% in units and approximately 11% in sales dollars compared with prior-year period (through Jun 1, 2021). The company reported strong unit growth with respect to its renewing pass holders. Also, the company reported solid sales with respect to the Epic Australia Pass. Unit sales through May 31, 2022, were up approximately 28% from the comparable period through June 1, 2021. The company is likely to have benefitted from the acquisition of Falls Creek and Hotham.

For fiscal 2022, the company has set aside approximately $315-$325 million to provide increased lift capacity and enhance the guest experience. The plan includes the installation of 21 new or replacement lifts across 14 of its resorts. It also includes a transformational lift-served terrain expansion at Keystone. The company believes the initiative will boost lift capacity by more than 45% in the locations. The company anticipates the projects to be completed in time for the 2022/2023 North American winter season. However, Vail Resorts stated that developments are subject to regulatory approvals.

Fiscal 2022 Guidance

Backed by strong demand and solid lift ticket sales, the company raised its guidance for fiscal 2022. The updated outlook is based on the assumption of normal conditions and operations throughout the Australian ski season and North American summer season and no impact from travel or operating restrictions associated with COVID-19.

In fiscal 2022, the company anticipates net income in the range of $314-$348 million up from the previous estimate of $304-$350 million. Resorts reported EBITDA is expected in the range of $828-$842 million, up from the previous estimate of $808-$837 million.

Zacks Rank and Stocks to Consider

Currently, Vail Resorts carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Some better-ranked stocks in the Zacks Consumer Discretionary sector are Bluegreen Vacations Holding Corporation (BVH - Free Report) , Funko, Inc. (FNKO - Free Report) and Civeo Corporation (CVEO - Free Report) .

Bluegreen Vacations sports a Zacks Rank #1. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has increased 44.1% in the past year.

The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels.

Funko sports a Zacks Rank #1. FNKO has a trailing four-quarter earnings surprise of 78.7%, on average. Shares of the company have declined 5.8% in the past year.

The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 26.8% and 31%, respectively, from the year-ago period’s reported levels.

Civeo carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 1,565.1%, on average. Shares of the company have increased 75.9% in the past year.

The Zacks Consensus Estimate for CVEO’s 2022 sales and EPS suggests growth of 12.5% and 1,450%, respectively, from the year-ago period’s levels.