Historically low snowfall totals across the Western U.S. has reduced visits to Vail Resorts (MTN) properties, by 10.8% this year. Vail, Park City and Beaver Creek (CO based resorts) received their lowest snowfall totals in 30 years (50% less than the next lowest winter season), while their 3 California based properties received 69% less snow than the 20-year average. Despite the lack of fresh powder, MTN reports that lift ticket revenue is up 1.6% YOY; with season pass sales (+14% YOY to 740,000) helping to offset the decline in single day visits (and lift ticket sales). Revenue declines from ski school (4.5%), dining (8.7%) and retail/rental property (11.5%), more accurately reflect the impact the weather has had on the company’s bottom line.
Howie Long-Short: MTN CEO Rob Katz has told investors the “challenging conditions” will cause the company to miss earlier earnings projections, but said the guaranteed revenue from season pass sales (+20% YOY) and investments the company has made in off-slope amenities (i.e. Park City got a $50 million renovation in ’15) would prevent further declines; even if the lack of snowfall continues. The disappointing fiscal Q1 comes on the heels of a typically slow summer for the company, reporting a loss of $28.4 million for the quarter that ended October 31st; though that figure is down from $63 million in Q1 ’17, the improvement comes as a result of a non-recurring tax benefit.
Fan Marino: The Western U.S. hasn’t had much powder, but that isn’t the case on the East Coast or in British Columbia. MTN reported that their newest acquisitions, both Stowe (Vermont) and Whistler Blackcomb (B.C.) have had strong winters thus far. Whistler’s snow conditions (96%-97% of the terrain was open Christmas Week) even abled the resort to open a week early this season!
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