Vail Resorts Inc. said growing summer visitation to its resorts as well as strong results at its pre-season ski sales narrowed normal seasonal losses at its Mountain segment in the fiscal first quarter ended Oct. 31 compared with a year earlier.
Visitation increased at the company’s four resorts in Colorado and three resorts around Lake Tahoe, while group business increased in where MTN acquired Park City Mountain Resort in September in a deal that paved the way for the creation of the largest contiguous area of groomed skiing in the United States.
Retail/rental revenue, which represents sales by more than 180 ski, snowboard, cycling, tennis, outdoor furniture specialty shops operated by Specialty Sports Venture, sales edged up $573,000, or 2.1 percent to $29.5 million.
Retail sales grew nearly $400,000, or 1.3 percent, as pre-ski-season sales events in Colorado more than offset lower sales by it All Mountain chain in the San Francisco area and the absence of revenue from an online store closed early this year. Rental income grew by $200,000, or 9.4 percent. Gross margin for Retail/rental business rose 150 basis points to 43.1 percent.
Retail/rental results are reported under MTN’s Mountain segment, which also breaks out Lift, Ski School, Dining and Other revenues. The segment’s biggest absolute sales gains during the quarter came from Other, where revenue grew by $1.9 million, or 9.1 percent to $22.9 million. The bulk of the growth came from increased summer activities, but $700,000 in incremental revenue was attributed to Park City Mountain Resort, which MTN acquired during the quarter.
As is normal, the Mountain segment reported negative EBITDA for the quarter, which ends before the ski season begins. Not including a non-cash gain related to settlement of a lawsuit related to its acquisition of Park City Mountain Resort, the Mountain segment’s losses widened to negative EBITDA of $71.2 million, up 6.6 percent from negative EBITDA of $66.8 million in the fiscal first quarter of 2013.
MTN’s resorts will easily make up the loss in the current quarter, based on the company’s most recent season pass sales and lodging bookings, the company’s CEO Rob Katz.
MTN season pass sales are up approximately 13 percent in units and 16 percent in sales dollars through Dec. 4, compared with the similar period in the prior year and including results from Park City in both periods. Season pass holders spend more on ski school, retail and rental and other Mountain segment products and services than other guests.
in Minneapolis and Detroit as well as in Utah,” said Katz. “In Colorado, we saw very healthy growth and in Tahoe we experienced a modest decline, which was better than our expectations, given the very challenging conditions in the prior year.”
MTN affirmed its September guidance for fiscal 2015 Resort Reported EBITDA, which reflects EBITDA from both its Mountain and its Lodging segments. Resort EBITDA margin, excluding the impact of the non-cash gain on the Park City litigation settlement, is expected to be approximately 25.3 percent, up 300 basis points from fiscal 2014.
The company also unveiled a $50 million capital improvement plan for its Utah resorts which includes construction of an eight-passenger two-way gondola between Canyons and Park City Mountain Resort to link 7,300 acres of skiable area.
