Vail Resorts, Inc. rental/retail sales slipped 0.7 percent as its skier visits dropped 15.3 percent during the holiday period ended Jan. 2, 2012, as many of its six western resorts experience the warmest and driest winter in decades. Still, the company did not revise its September earnings estimate, although it acknowledged meeting them would be difficult if the snow did not start falling soon.
The numbers shed light on what is shaping up as a potentially disastrous season for snow sports businesses after last year’s epic winter, which started early and went long and set records for skier visits and snow sports product sales.
“We have had some very unusual weather so far this season,” said Vail Resorts CEO Rob Katz. “For the first time in 30 years, a lack of snow has not allowed us to open the back bowls in Vail as of Jan. 6, 2012 and, for the first time since the late 1800s, it did not snow at all in Tahoe in December.”
Season-to-date total skier visits at the company's resorts were down approximately 15.3% through Jan. 2, 2012, compared to the prior year season-to-date period ended Jan. 3, 2011, including lower utilization by season pass holders.
Fiscal year-to-date retail/rental revenue, which includes preseason ski sale events, was down 0.7% despite the acquisition in July, 2011 of Wisconsin-based O2gearshop.com, which generated $2 million in sales in the quarter ended Oct. 31. On Saturday, O2gearshop was offering some 2012 skis for between 23 and 32 percent off. Most of Vail’s rental/retail revenue comes from Specialty Sports Ventures, which operates more than 165 specialty shops California, Colorado, Nevada and Utah that sell snow sports, bicycling, golf, tennis and other sporting goods.
Given snow conditions, Katz said the company was “very pleased” with the results, which he attributed in part to a strong season pass program and the broader array of experiences, activities and amenities the company offers at its resorts.
“This is most apparent in Tahoe, where our investment in snowmaking has allowed us to open up more terrain than all the other resorts in the area combined. At this point, with three quarters of the ski season still remaining, we are not revising the earnings guidance we issued in September 2011. However, we would acknowledge that those targets will be more difficult to achieve given the results over the holidays.”
Vail Resorts, Inc. subsidiaries operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado, and Heavenly and Northstar in the Lake Tahoe area of California and Nevada, and the Grand Teton Lodge company in Jackson Hole, Wyoming.
