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Vail Resorts Inc (MTN) Reports Increased Season Pass Sales Amidst First Quarter Loss

  • Vail Resorts Inc (NYSE:MTN) reports a net loss of $175.5 million in Q1 fiscal 2024, widening from $137.0 million in the prior year.

  • Season pass sales for the upcoming 2023/2024 ski season rose approximately 4% in units and 11% in sales dollars year-over-year.

  • The company reaffirms its fiscal 2024 guidance with net income expected between $316 million and $394 million, and Resort Reported EBITDA between $912 million and $968 million.

  • Vail Resorts Inc (NYSE:MTN) declares a quarterly cash dividend of $2.06 per share, payable in January 2024.

On December 7, 2023, Vail Resorts Inc (NYSE:MTN) released its 8-K filing, detailing the financial results for the first quarter of fiscal 2024, which ended on October 31, 2023. The company reported a net loss of $175.5 million, compared to a net loss of $137.0 million for the same period in the prior year. The Resort Reported EBITDA loss was $139.8 million, a significant decline from the $96.5 million loss reported in the first quarter of fiscal 2023.

Financial Highlights and Challenges

The increased net loss was primarily attributed to cost inflation, including a $7 million impact from employee investments, $14 million lower EBITDA from Australian resorts due to normalized results following a record previous year, and $4 million lower EBITDA from North American summer operations due to lower demand and weather-related challenges. Additionally, foreign exchange rates had a $4 million negative impact.

Season Pass Sales and Dividend Declaration

Despite the net loss, Vail Resorts Inc (NYSE:MTN) experienced a positive trend in season pass sales, which increased approximately 4% in units and 11% in sales dollars through December 4, 2023, compared to the same period in the prior year. The company also declared a quarterly cash dividend of $2.06 per share, payable on January 9, 2024, to shareholders of record as of December 26, 2023. During the quarter, approximately 0.2 million shares were repurchased at an average price of $211 for a total of $50 million.

Operational Performance

Mountain segment net revenue decreased by 14.5% to $172.5 million, primarily due to weather-related challenges at Australian ski areas. The Lodging segment, however, saw a 6.0% increase in net revenue to $78.4 million, driven by favorable conditions in the Grand Teton region. The Resort net revenue, combining Mountain and Lodging segments, decreased by $25.0 million to $254.3 million.

Capital Investments and Future Outlook

Vail Resorts Inc (NYSE:MTN) continues to invest in enhancing the guest experience, with significant investments across new lifts, expanded terrain, and guest-facing technology. The company reaffirmed its fiscal 2024 guidance, expecting net income between $316 million and $394 million, and Resort Reported EBITDA between $912 million and $968 million.

The company's CEO, Kirsten Lynch, commented on the results and outlook, stating,

We are pleased with our results for the quarter, which exceeded our expectations due to the timing of expenses, primarily related to season ramp-up activities."

Lynch also highlighted the company's commitment to investment and innovation, including the acquisition of Crans-Montana Mountain Resort in Switzerland and the introduction of new technology for the upcoming ski season.

For a detailed discussion of Vail Resorts Inc (NYSE:MTN)'s financial condition and results of operations, investors and interested parties are encouraged to review the Managements Discussion and Analysis of Financial Condition and Results of Operations section of the Companys Form 10-Q for the first fiscal quarter ended October 31, 2023, which was filed today with the Securities and Exchange Commission.

Vail Resorts Inc (NYSE:MTN) remains focused on its growth strategy, capital investments, and commitment to returning capital to shareholders, while navigating the challenges posed by economic uncertainty and weather variability.

Explore the complete 8-K earnings release (here) from Vail Resorts Inc for further details.

This article first appeared on GuruFocus.