Broomfield, Colorado — Yesterday, investors were anticipating the fourth quarter and full-year earnings report for Vail Resorts. However, the most newsworthy thing from Vail Resorts yesterday was a plan to prepare for its next chapter of growth.
Yesterday, Vail Resorts announced a two-year transformation plan to help them continue growing. Vail Resorts states this “two-year Resource Efficiency Transformation Plan is designed to improve organizational effectiveness and scale for operating leverage as the company grows.” This three-pillar plan, which consists of Scaled Operations, Global Shared Services, and Expanded Workforce Management, is expected to save Vail $100 million in cost efficiencies by the culmination of the 2026 fiscal year. These moves are what they believe will position them for more acquisitions, as they are eyeing ski resorts in North America, Europe, and Asia.
Part of this efficiency push will result in layoffs. Two percent of their workforce will be laid off: 14 percent of their corporate workforce will be fired, while less than one percent of operations employees and 0.2 percent of frontline employees will be affected. Affected workers will be offered the chance to apply for different positions at Vail Resorts.
The move was a wise distraction from their fourth-quarter earnings report, which featured disappointing numbers. Skier visits dropped 9.5%, caused by underwhelming snowfall totals and warm weather. Australia’s ski season didn’t help, with warm weather leading to early closures.
Compared to the fiscal year of 2023, net income dropped from $268.1 million to $230.4 million. Their revenues were down to $265.39 million compared to $269.77 million. However, this surpassed revenue estimates by 1.14%. While their unit pass sales dropped by 3%, it did increase by 3% in sales dollars. This was helped by the 8% price increase of Epic Passes. However, the rise of Epic Day Passes partially offset the amount of sales dollars that they could have made.
Vail Resorts CEO Kirsten Lynch said the following about the 2024 fiscal year:
“Our overall results for the year highlight the stability and resilience of our advance commitment strategy. Skier visitation declined 9.5% compared to the prior year, driven by unfavorable conditions across our resorts in North America and Australia, combined with the impact of broader industry normalization post-COVID following record visitation in North America during the 2022/2023 ski season. In North America, snowfall across our western resorts was down 28% from the prior year and our eastern U.S. resorts experienced limited natural snow and variable temperatures. Despite industry normalization and challenging conditions, Resort Reported EBITDA, excluding the impact of the Crans-Montana acquisition, remained consistent with prior year results. Performance was supported by strong growth in ancillary spending per visit across ski school, dining, and rental businesses at our resorts, and by strong delivery of the guest experience and cost discipline across our operations.”
They’ve announced another round of dividends and stock buybacks to appease shareholders. A cash dividend of $2.22 per share will be paid out on October 24th, 2024, and they purchased 0.1 million shares of common stock during the last fiscal quarter. Vail Resorts stock is down roughly 14% since the beginning of 2024.
Click here to read the Q4 results, and you can check out their two-year transformation plan here.
Image Credits: Vail Resorts
