Vail Resorts, Inc. MTN reported second-quarter fiscal 2020 results, with earnings and revenues missing the Zacks Consensus Estimate. Following the results, shares of the company fell 12.9% in after-hours trading on Mar 9. The decline was primarily caused by investors’ negative sentiments regarding the uncertainty of the coronavirus impact and dismal results.
In the quarter under review, the company reported earnings of $5.07 per share that missed the Zacks Consensus Estimate of $5.44 per share. In the year-ago quarter, Vail Resorts reported adjusted earnings of $5.02 per share.
Quarterly revenues came in at $924.6 million, which missed the consensus mark of $954.1 million. However, the metric increased 8.8% on a year-over-year basis. The upside can be attributed to solid performance in the Mountain segment and Lodging segment.
Vail Resorts, Inc. Price, Consensus and EPS Surprise
Vail Resorts, Inc. price-consensus-eps-surprise-chart | Vail Resorts, Inc. Quote
Vail Resorts generates revenues from two segments — Resort (99.9% to net revenues in second-quarter fiscal 2020) and Real Estate (0.1%). Under the Resort segment, the company has Mountain and Lodging services, and other (contributing 81.5% to net revenues in fiscal second quarter) as well as Mountain and Lodging retail and dining (18.5%).
Meanwhile, Vail Resorts has two reporting segments — Mountain and Lodging.
The Mountain segment reported revenues of $845.6 million in the quarter under review, up 9% year over year. The metric was mainly driven by increase in pass product revenues and incremental revenues from Peak Resorts.
The segment’s EBITDA amounted to $373 million compared with $352 million in the prior-year quarter. Operating expenses in the Mountain segment totaled $472.7 million, up 11.5% year over year.
Lodging net revenues in the reported quarter were $78.9 million, up 7.7% year over year on rise in sales from Peak Resort.
Under the segment, EBITDA declined 8% to $5.3 million from the prior-year quarter’s figure. Operating expenses in the Lodging segment rose 9% year over year to $73.6 million.
Vail Resorts reported EBITDA of $377 million in the quarter under review compared with $356.9 million in the prior-year quarter.
Resort operating expenses totaled $546.3 million, up 11.1% year over year. Total segmental operating expenses increased 11.1% year over year to $547.8 million.
Cash and cash equivalents as of Jan 31, 2020, totaled $126.8 million. Net long-term debt as of Jan 31, 2020, was $1,817.1 million.
Vail Resorts approved a quarterly cash dividend of $1.76 per share of common stock, which is payable on Apr 9, 2020, to its shareholders of record as of Mar 26, 2020.
Given the uncertainty surrounding the impact of coronavirus on the broader U.S. travel market, the company has withdrawn its previous guidance issued on Jan 17, 2020. In the week ended Mar 8, 2020, the company saw a negative change in performance compared with the previous week owing to lower destination skier visits. The company expects this trend to continue and potentially worsen in the upcoming weeks as well. For 2020, the company expects adjusted EBITDA to be approximately $20 million below the midpoint of $778-$818 million.
Zacks Rank & Key Picks
Vail Resorts currently 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 same space are Camping World Holdings, Inc. CWH, RCI Hospitality Holdings, Inc. RICK and Twin River Worldwide Holdings, Inc. TRWH, each sporting a Zacks Rank #1.
Camping World Holdings has an expected three-five year earnings per share growth rate of 10%.
2020 earnings for RCI Hospitality Holdings and Twin River is expected to rise 13.9% and 2.8%, respectively.
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