Factors Setting the Tone for Vail Resorts' (MTN) Q3 Earnings
Vail Resorts, Inc. MTN is scheduled to report third-quarter fiscal 2023 results on Jun 8 after the closing bell. In the last reported quarter, the company recorded a negative earnings surprise of 16.6%.
How are Estimates Placed?
The Zacks Consensus Estimate for fiscal third-quarter earnings per share (EPS) is pegged at $8.88, indicating a decline of 3.1% from $9.16 reported in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $1,246 million. The metric suggests an increase of 5.9% from the year-ago quarter’s figure.
Vail Resorts, Inc. Price and EPS Surprise
Vail Resorts, Inc. price-eps-surprise | Vail Resorts, Inc. Quote
Let's take a look at how things have shaped up in the quarter.
Factors at Play
Vail Resorts’ first-quarter fiscal 2023 performance is likely to have reflected solid contributions from the 2022-2023 North American ski season. On Apr 21, 2023, the company provided a business update, thereby reporting strength in destination visitation and solid lift ticket sales at all North American destination mountain resorts and regional ski areas (including the results of Seven Springs, Hidden Valley and Laurel Mountain). Also, it reported growth in its ancillary businesses on account of improved staffing levels and the relaxation of COVID-19 induced operational restrictions.
Season-to-date (through Apr 16, 2023), total skier visits increased 6.1% compared with the prior-year season-to-date period’s (Apr 17, 2022) levels. Strong demand from local and destination guests and improved conditions at Northeastern U.S. resorts contributed to a rise in visitation compared with the prior-year period’s levels. Lift ticket revenues (including an allocated portion of season pass revenues for each applicable period) increased 4% compared with the prior year’s season-to-date period’s levels. Ski school and dining revenues rallied 26.4% and 35.3%, respectively, on a year-over-year basis. Retail/rental revenues for North American resort and ski area store locations increased 21.8% compared with the prior-year season-to-date period’s figure.
The emphasis on strategic investments (in expansion projects and network-wide scalable technology) and offerings (such as Epic Pass, Epic Local Pass, Epic Day Pass and Epic Coverage products) are likely to have aided the company’s performance in the fiscal third quarter.
However, abnormal weather variability across its resorts (in the East) and significant storm related disruptions at our Tahoe resorts are likely to have affected the company’s operations in the fiscal third quarter. Rise in operating expenses are likely to have dented margins in the to-be-reported quarter. For the fiscal third quarter, our model predicts total lodging operating expenses to rise 9% year over year to $84.3 million. We expect total mountain operating expense to rise 8.7% year over year to $531.3 million.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Vail Resorts this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that's not the case here.
Earnings ESP: Vail Resorts has an Earnings ESP of -2.54%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Poised to Beat Earnings Estimates
Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat.
The Aaron's Company, Inc. AAN has an Earnings ESP of +2.00% and a Zacks Rank #2.
Shares of Aaron’s have declined 32.4% in the past year. AAN’s earnings surpassed the consensus mark in all of the trailing four quarters, the average being 199.8%.
Deckers Outdoor Corporation DECK has an Earnings ESP of +1.24% and a Zacks Rank of 3.
Shares of Deckers have increased 78.3% in the past year. DECK’s earnings surpassed the consensus mark in all of the trailing four quarters, the average being 17.7%.
Hyatt Hotels Corporation H has an Earnings ESP of +1.15% and a Zacks Rank #3.
Shares of Hyatt have gained 21.6% in the past year. H’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 1,372.6%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Hyatt Hotels Corporation (H) : Free Stock Analysis Report
The Aaron's Company, Inc. (AAN) : Free Stock Analysis Report
Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
Vail Resorts, Inc. (MTN) : Free Stock Analysis Report
