Vail Resorts (MTN) Third-quarter earnings lag estimates, revenue leads

Vail Resorts, Inc. MTN reported mixed results for the third quarter of fiscal 2022, with earnings missing Zacks’ consensus estimate and revenue flat. However, both the high and the low have increased year over year.

Following the announcement, shares of the company gained 4.8% in the after-hours trading session on June 9. Positive investor sentiments were seen as the company reported stability in its operations despite headwinds resulting from weather conditions, personnel issues and the impacts of COVID-19.

Kirsten Lynch, General Manager of Vail Resorts, said, “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 exceeded prior year results, primarily due to the greater impact of COVID-19 and related limitations and restrictions on prior year period results.

Profits and income

In the quarter under review, the company reported earnings per share (EPS) of $9.16 per share, missing Zacks’ consensus estimate of $9.17. The metric rose from $6.72 in the year-ago quarter.

Vail Resorts, Inc. Price, Consensus, and EPS Surprise

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

Quarterly revenue was $1,176.7 million, beating the consensus mark of $1,158 million by 1.7%. Revenue increased 32.3% year over year. The increase was primarily fueled by strong destination traffic as well as strong lift ticket sales at our Colorado and Utah resorts.

Sector 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-on-year. The rise was primarily driven by fewer COVID-19 related limitations and restrictions compared to prior year period levels.

During the quarter, restaurant and retail/rental revenue increased 73.6% and 38.6%, respectively, year-over-year. Lift and ski school revenue increased 23.7% and 50.4% year-over-year to $714.7 million and $120.9 million, respectively.

Segment EBITDA was $596 million in the fiscal third quarter, compared to $456.9 million in the year-ago quarter. Mountain segment operating expenses totaled $489 million, up 30.7% year-over-year.

Net accommodation revenue (excluding payroll expense reimbursements) in the reported quarter was $87.2 million, up 54.6% year-over-year, primarily due robust restaurant revenues. During the quarter, segment EBITDA was $14.5 million, compared to $5.3 million in the prior year quarter.

During the quarter, accommodations segment operating expenses 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 to $461.2 million in the year-ago quarter. Total operating expenses for the segment totaled $568 million, up 32.4% year-over-year.

Balance sheet

Cash and cash equivalents as of April 30, 2022 totaled $1,401.2 million, compared to $1,344.7 million a year ago.

Long-term net debt was $2,687.5 million at the end of the quarter, compared to $2,739.9 million at the end of the prior year quarter.

As of April 30, 2022, the company had total cash and revolvers of approximately $2 billion. This includes $1.4 billion in cash, $417 million in US revolver availability under the Vail Holdings credit agreement, and $212 million in revolver availability under the credit agreement. of Whistler.

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

other information

The company announced strong season pass sales for the upcoming 2022/2023 North American ski season. Since the start of the season (through May 31, 2022), the company said sales of Pass products have increased approximately 9% in units and approximately 11% in sales dollars compared to the period of the previous year (until June 1, 2021). The company saw strong unit growth in its renewal cardholders. Additionally, the company saw strong sales for the Epic Australia Pass. Unit sales through May 31, 2022 were up approximately 28% compared to the comparable period through June 1, 2021. The company likely benefited from the acquisition of Falls Creek and Hotham.

For fiscal 2022, the company has set aside about $315 million to $325 million to increase elevator capacity and improve the customer experience. The plan includes the installation of 21 new or replacement ski lifts in 14 of its stations. It also includes a transformational extension of the land served by an elevator in Keystone. The company estimates that the initiative will increase elevator capacity by more than 45% at venues. The company expects the projects to be completed in time for the 2022/2023 North American winter season. However, Vail Resorts said the developments are subject to regulatory approvals.

Directions for the 2022 financial year

Supported by strong demand and strong lift ticket sales, the company has raised its guidance for fiscal 2022. The updated outlook is based on the assumption of normal conditions and operations throughout the season. Australian ski season and the North American summer season and the lack of impact of travel or operating restrictions. associated with COVID-19.

In fiscal 2022, the company expects net income in the range of $314-348 million, down from $304-350 million. The resorts said EBITDA is expected to be between $828 million and $842 million, up from the previous estimate of $808 million to $837 million.

Zacks Ranking and Stocks to Consider

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

Some top-ranked stocks in Zacks’ Consumer Discretionary sector are Bluegreen Vacations Holding Corporation BVH, Funko Inc. FNKO and Civeo Corporation CVEO.

Bluegreen Vacations sports a No. 1 Zacks rank. BVH has a trailing four-quarter earnings surprise of 85.9% on average. The stock is up 44.1% over the past year.

Zacks consensus estimate for BVH’s current year sales and EPS indicate growth of 11.2% and 35.1%, respectively, from reported levels in the prior year period .

Funko sports a No. 1 Zacks rank. FNKO has a trailing four-quarter earnings surprise of 78.7%, on average. Shares of the company are down 5.8% over the past year.

Zacks’ consensus estimate for Funko’s current fiscal year sales and EPS suggests growth of 26.8% and 31%, respectively, from reported levels in the prior year period.

Civeo wears a Zacks Rank #2 (Buy). The company has a four-quarter earnings surprise of 1,565.1% on average. Shares of the company are up 75.9% over the past year.

The Zacks consensus estimate for CVEO sales and EPS in 2022 suggests growth of 12.5% ​​and 1,450%, respectively, from prior year period levels.

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