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Vail Resorts (MTN) Posts Narrower-Than-Expected Loss in Q1

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Vail Resorts, Inc. MTN reported better-than-expected first-quarter fiscal 2020 results. Following the results, shares of the company increased 3.1% in after-hours trading on Dec 9. So far this year, the stock has gained 9.5% compared with the industry’s 7% growth.

In the quarter under review, the company incurred an adjusted loss of $2.23 per share, narrower than the Zacks Consensus Estimate of a loss of $3.00. In the year-ago quarter, Vail Resorts had incurred an adjusted loss of $2.43 per share.

Quarterly revenues came in at $267.8 million, outpacing the consensus mark of $256 million and increased 21.7% on a year-over-year basis. Total revenues were driven by growth in each segment. Also, robust performance of the company’s Australian resorts along with North American resorts' summer activities contributed to the first-quarter results.

Notably, growth in the Australia market was driven by solid Epic Australia Pass sales, good conditions and the addition of the Leichhardt chairlift at Perisher.

Vail Resorts, Inc. Price, Consensus and EPS Surprise


Segment Results

Vail Resorts generates revenues from two segments — Resort (98.4% of net revenues in first-quarter fiscal 2020) and Real Estate (1.6%). Under the Resort segment, the company has Mountain and Lodging services, and other (constituting 67.2% of net revenues in the fiscal first quarter), and Mountain and Lodging retail and dining (31.2%).

Meanwhile, Vail Resorts has two reporting segments — Mountain and Lodging.

The Mountain segment reported revenues of $180.8 million in the quarter under review, up 24.7% year over year. The metric was mainly driven by robust performance of Falls Creek and Hotham operations.

The segment’s EBITDA loss came in at $80 million compared with a negative $83.6 million in the prior-year quarter. Operating expenses at the Mountain segment totaled $228.7 million, up 17.8% year over year.

Lodging net revenues in the reported quarter were $83.6 million, up 10.1% year over year on rise in sales from Triple Peaks and Peak Resort.
Under the segment, EBITDA decreased 16.2% to $3.3 million from the prior-year quarter. Operating expenses at the Lodging segment rose 8.2% year over year to $37.7 million.

Operating Results

Vail Resorts reported EBITDA loss of $76.7 million in the quarter under review compared with a negative $72.5 million a year ago.

Resort operating expenses totaled $341.5 million, up 16.2% year over year. Total segmental operating expenses increased 17.7% year over year to $346.8 million.

Balance Sheet

Cash and cash equivalents as of Oct 31, 2019, totaled $136.3 million. Net long-term debt as of Oct 31, 2019, was $2,005.1 million.

Vail Resorts approved a quarterly cash dividend of $1.76 per share of common stock, which is payable Jan 9, 2020, to its shareholders of record as of Dec 26, 2019.

Fiscal 2020 Guidance

For fiscal 2020, the company’s total EBIDTA is estimated at $776-$822 million.

Zacks Rank & Other Stocks to Consider

Vail Resorts currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the Consumer Discretionary sector that warrant a look are Vista Outdoor Inc VSTO, YETI Holdings, Inc (YETI - Free Report) and Studio City International Holdings Limited MSC. Vista Outdoor and YETI Holdings sport a Zacks Rank #1 (Strong Buy), whereas Studio City carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vista Outdoors’ current-year earnings are expected to rise 14.3%.

YETI Holdings has three-five year expected earnings growth rate of 15.8%.

Studio City surpassed the consensus mark in each of the trailing four quarters, the average being 90%.

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