Vail Resorts, Inc. CEO Kirsten Lynch told a group of analysts this week that results for the fiscal second quarter reflected the stability provided by the company’s Season Pass Program, its investments in the guest experience and the strong execution of the company’s teams across all of its Mountain Resort properties.

The strong execution was able to deliver a beat on the bottom line as EPS of $6.56 per share beat the Street’s consensus estimate by 25 cents per share even as the revenue line ($1.14 billion) missed by $2.36 million.

Lynch shared that Vail Resorts is on track to achieve its two-year Resource Efficiency Transformation Plan, which the company announced with September 2024 earnings through scaled operations, global shared services and expanded workforce management. The company also noted it is on track to improve organizational effectiveness and scale for operating leverage as it grows globally and delivers the expected cost efficiencies in fiscal year 2025, with the $100 million in annualized cost efficiencies by the end of its fiscal 2026 fiscal year.

Lynch said that second-quarter visitation at the company’s North American resorts was slightly above prior-year levels, which she attributed to improved conditions, partially offset by the expected continued industry demand normalization and the shift in destination guest visitation for the spring.

“Destination guest visitation at our Western North American destination Mountain Resorts was below prior-year levels, which we believe was driven by the continued shift in historical visitation patterns across the ski industry to later in the ski season, which increased after challenging early season conditions in the prior year,” Lynch noted.

The company reported that local guest visitation aligned with expectations as conditions across Vail’s North American resorts improved from the prior year and returned to more typical conditions. Vail also reported ancillary spending per destination guest visit to be strong across the company’s ski school and dining businesses throughout the quarter.

“Ancillary spend per destination guest visit was strong across our ski school and dining businesses throughout the quarter, while overall revenue in our Ancillary businesses was impacted by the lower mix of destination visitation,” Lynch detailed. “Through the second quarter, guest satisfaction scores across our destination mountain resorts and regional ski areas were strong and grew relative to scores in the prior three years, excluding Park City Mountain, where the guest experience during the thirteen-day patrol union strike was not the experience we wanted to provide.”

Company CFO Angela Korch said second-quarter net income attributable to Vail Resorts was $245.5 million, or $6.56 per diluted share, for the second quarter of fiscal 2025, compared to net income attributable to Vail Resorts of $219.3 million, or $5.76 per diluted share, in the prior-year Q2 period.

Total net revenue increased $59.3 million, or 5.5 percent, to $1.14 billion for the second quarter, compared to the year-ago period.

Lodging Segment
Lodging segment net revenue, excluding payroll cost reimbursements, decreased $3.1 million, or 4.3 percent, to $70.2 million for the second quarter ended January 31, primarily driven by a decrease in destination skier visitation which decreased demand for lodging and other Ancillary services proximate to the company’s mountain resorts, as well as a net reduction in inventory of available managed condominium rooms proximate to its mountain resorts.

Lodging segment reported EBITDA decreased $2.7 million, or 56.5 percent, for the second quarter compared to the prior-year Q2 period, which includes $0.9 million of stock-based compensation expense for both Q2 periods. Lodging segment results were said to be impacted by a decrease in property tax refunds received compared to the prior-year Q2 period and also include one-time operating expenses attributable to the company’s Resource Efficiency Transformation Plan of $0.3 million for the quarter.

Resort Segment
Resort segment net revenue was $1.14 billion for the fiscal second quarter, an increase of $59.3 million as compared to Resort net revenue of $1.08 billion for the prior-year Q2 period.

Resort segment reported EBITDA was $459.7 million for the second quarter, an increase of $34.6 million, or 8.1 percent, compared to the prior-year Q2 period, which includes one-time operating expenses attributable to the Resource Efficiency Transformation Plan of $2.9 million for the quarter, as well as $0.1 million of acquisition-related expenses for the second quarter of fiscal 2025 compared to $2.1 million of acquisition-related expenses for the second quarter of the prior year.

Season-to-Date Summary
For the season-to-date period through March 2 for the company’s North American destination Mountain Resorts and regional ski areas, total skier visits were down 2.5 percent compared to the fiscal year 2024 comparative season-to-date period.

Season-to-date total lift ticket revenue, including an allocated portion of season pass revenue for each applicable period, was up 4.1 percent compared to the fiscal year 2024 comparative season-to-date period.

In the Ancillary businesses, season-to-date ski school revenue was up 3 percent, dining revenue was up 3.1 percent and combined retail and rental revenue for North American Resort and ski area locations was down 2.9 percent compared to the prior-year Q2 period.

Similar to the drivers in the second quarter, Korch said the season-to-date results through March 2 reflect strong local visitation from the improved conditions early season, with destination visitation impacted by the industry demand normalization and an expected shift in destination guest visitation to the spring.

Ancillary spend per destination guest visit was strong across the company’s ski school and dining businesses, with overall performance reflecting the higher mix of local visitation during the period.

Capital Structure and Allocation Update
As of January 31, the company’s total liquidity, as measured by total cash plus revolver availability and delayed draw term loan availability, was reported to be ~ $1.7 billion, which includes $488 million of cash on hand, $509 million U.S. revolver availability and $450 million of U.S. delayed draw term loan availability under the Vail Holdings credit agreement and $204 million of revolver availability under the Whistler Credit Agreement.

On January 27, 2025, the company completed an amendment of its Vail Holdings credit agreement, which increased the U.S. revolver by an incremental $100 million to $600 million and provided an incremental $450 million term loan facility in the form of a delayed draw term loan, which the company can draw upon at any time at its option until January 2026, when any unused amount of the delayed draw term loans will expire.

On January 30, 2025, the company repurchased approximately $50 million of its zero percent convertible senior notes for an aggregate cash repurchase amount of roughly $48 million, representing a 4 percent discount to par value. Following closing these repurchases, the company has $525 million of zero percent convertible senior notes outstanding, which mature on January 1, 2026.

Proceeds from any borrowings on the incremental term loan facility and the increase in the revolver credit loan commitment, both of which are coming drawn, are available for use to refinance the company’s zero percent convertible senior notes or for other general corporate purposes. Until the convertible notes mature or otherwise refinanced or repurchased, the company will continue to benefit from the zero percent interest coupon.

Korch said Vail Resorts continues to have a strong balance sheet. As of January 31, 2025, the company’s net debt was 2.5x its trailing 12 months total reported EBITDA. The company declared a quarterly cash dividend on Vail Resorts’ common stock of $2.22 per share. The dividend will be payable on April 10, 2025, to shareholders of record as of March 27, 2025. In addition, the company repurchased approximately 0.1 million shares during the quarter at an average price of approximately $196 per share for $20 million. The company has 1.5 million shares remaining under its authorization for share repurchases.

Korch said the company would “continue to be disciplined stewards of our shareholders’ capital and prioritizing investments in our guests and our employee experience high-return capital projects, strategic acquisition opportunities and returning capital to our shareholders. The company has a strong balance sheet and remains focused on returning capital to shareholders while always prioritizing the long-term value of our shares.”

Outlook
Korch also reported that, excluding a $7 million impact from the change in foreign currency rates, the company’s Resort reported EBITDA guidance midpoint for the year ending July 31, 2025 is unchanged from the original guidance provided on September 26, 2024.

For the remainder of the season, the company is expecting improved performance compared to the season-to-date period, including a continued shift in destination visitation patterns to later in the ski season, based on the significant base of pre-committed guests, current lodging booking trends, and historical guest behavior patterns. The company now expects net income attributable to Vail Resorts for fiscal 2025 to be between $257 million and $309 million.

Resort segment reported EBITDA for the fiscal 2025 period is forecasted to be between $841 million and $877 million, consistent with the original fiscal 2025 guidance the company provided on September 26, 2024. The updated guidance includes an estimated $15 million in one-time costs related to a multiyear Resource Efficiency Transformation Plan and an estimated $1 million of acquisition and integration-related expenses specific to Crans-Montana. The updated guidance also includes an estimated $7 million impact from foreign exchange rates.

At the midpoint, the guidance implies an estimated Resort EBITDA margin for fiscal 2025 to be approximately 28.8 percent, or 29.3 percent before the one-time costs related to the Resource Efficiency Transformation Plan.

The updated guidance also assumes a continuation of the current economic environment, industry normalization to pre-COVID guest behavior and normal weather conditions for the remainder of the 2024-2025 North American and European ski season and the 2025 Australian ski season.

The updated guidance reflects the volatility of the foreign currency exchange rate compared to the original assumptions.

The company’s updated guidance assumes a currency rate as of March 7, 2025, including an exchange rate of 70 cents between the Canadian dollar and U.S. dollar related to the operations of Whistler Blackcomb in Canada, an exchange rate of 63 cents between the Australian dollar and the U.S. dollar related to the operations of Perisher, False Creek and Hotham in Australia, and an exchange rate of $1.13 between the Swiss franc and the U.S. dollar related to the operations of Andermatt-Sedrun and Crans-Montana in Switzerland.

Vail Resorts does not include any potential impacts related to future fluctuations in foreign current exchange rates, which could be impacted by tariffs, trade disputes or other factors.

Image courtesy Crans-Montana/Vail Resorts, Inc.