Broomfield, Colorado — Following a down year for the ski industry, Vail Resorts struggled, and investors on Wall Street are taking notice.
On June 6th, Vail Resorts announced its 2024 Q3 Results, with this timeframe concluding on April 30th. There were some positives, as net income and resort-reported EBITDA were up compared to last year. Pass sales were down 5% in units and increased 1% in revenue in a bit of a downer. The total skier visits were down 3.2% compared to the same period last year. For the first three fiscal quarters of 2024, their skier visits across all properties were down 9%.
Kirsten Lynch, the CEO of Vail Resorts, noted some of the struggles they dealt with during this past fiscal quarter:
“Our results throughout the 2023/2024 North American ski season highlight both the stability provided by our season pass program and the investments we have made in our resorts and employees. The winter season included significant weather-related challenges, with approximately 28% lower snowfall for the full winter season across our western North American resorts compared to the same period in the prior year and limited natural snow and variable temperatures at our Eastern U.S. resorts (comprising the Midwest, Mid-Atlantic, and Northeast)…”
Ultimately, their earnings per share (EPS) and revenue fell short of Wall Street’s expectations. Investment news websites were less than thrilled by the results. Marketwatch noted that their stocks were on a “downhill slide” following the Q3 results. Barron’s said that earnings and guidance disappointed, leading to stocks falling.
Wall Street unsurprisingly took notice. Stocks dropped around 10% by the end of Friday due to Vail Resorts missing quarterly expectations. Their stock has fallen approximately 23% over the past six months and around 32.56% over the past year. This is despite what’s actually been a good year for the stock market.
For Q4, a point of alarm is the amount of Epic Pass sales in Australia. Pass sales are down 22% in units compared to the same point last year (May 29, 2024). Based on staying updated with the Australian ski industry, the future of skiing there isn’t particularly rosy. Vail’s properties in the land down under include Falls Creek, Hotham, and Perisher.
It’s not all bad news for Vail Resorts, though. The acquisition of Crans Montana, its second European property, will likely increase pass sales on that continent. In addition, the continued implementation of My Epic Gear, if marketed properly, will help Vail gain some more revenue as well.
Ultimately, it’s hard for me to interpret what this means for the future of Vail Resorts. The chance of them selling properties seems unlikely, as having ski resorts across the country helps them sell Epic Passes. It seems more likely to buy more geographically varied properties worldwide. In an investor presentation earlier this year, Vail Resorts noted that they’re eyeing expansion opportunities in Asia, Europe, and North America. How much can they continue to grow their pass numbers in North America, which is already stuffed with multi-mountain pass products?
The fact is that the ski industry has historically been inconsistent, leading to mixed results over time. Some shareholders are starting to realize that.
Image Credits: Jean Estrella (Featured Image), Vail Resorts
