Vail Resorts said revenues from its more than 180 specialty retail stores and gear rental shops reached $85.7 million in the second fiscal quarter ended Jan. 31, up 2.4 percent, compared to the same period in the prior year.
Vail Resorts attributed the growth in retail and rental sales to Colorado and Utah, as well as incremental revenue generated by Hoigaard's, a Minneapolis- area retailer acquired in April 2013. Growth was offset by revenue declines at stores near its snow starved Tahoe resorts and a decrease in on-line sales following the closing of a money-losing online store.
Retail cost of sales fell 3.6 percent to $34.0 million, or 39.7 percent of sales, down from 42.0 percent a year earlier.
Vail Resorts, through its subsidiaries, operates the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado; Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada; Canyons in Park City, Utah; Afton Alps in Minnesota and Mt. Brighton in Michigan; and the Grand Teton Lodge Company in Jackson Hole, Wyoming.
Visitation up 9.7 percent despite drought in Tahoe
“Overall, we are very pleased with our performance in the second quarter of fiscal 2014,” said CEO Rob Katz. “Despite the very challenging conditions in Tahoe, where total snowfall was down 73 percent as of January 31, 2014 compared to the prior year, we have seen overall growth in visitation of 9.1 percent and increased guest spending, highlighting the strength of our geographically diverse business model. Results in Colorado were particularly encouraging, with total visitation up 11.9 percent, ski school revenue up 9.7 percent and dining revenue up 16.0 percent compared to the prior year. Unfortunately, our results were tempered by the very poor snowfall and warm temperatures in Tahoe where total visitation was down 27.7 percent compared to the prior year. Our Tahoe resorts only had 33 percent of trails open as of January 31, 2014, compared to 95 percent of trails open at the same point last season and compared to 65 percent of trails open even during the very challenging 2011/2012 ski season.
“Despite the conditions, our Tahoe resorts have done an admirable job in maximizing open terrain and maintaining high levels of guest service to differentiate our resorts in that marketplace,” Katz continued. “Overall, total lift revenue increased by 11.2 percent, ski school revenue increased by 12.5 percent and total Mountain revenue increased by 8.3 percent compared to the prior year. Our mountain performance includes the results of Canyons, which were in line with our previous public estimates, and the results of our Urban ski areas, whose performance was quite strong and also in line with our expectations.”
Nevertheless, Vail Resorts lowered its fiscal 2014 guidance for Resort Reported EBITDA, which includes results from both its Mountain and its Lodging segments, by about 10 percent to between $255 million and $265 million to reflect the challenging results at its three resorts in the Lake Tahoe regions.
Season-to-Date Metrics through March 9, 2014
The Company announced ski season-to-date metrics for the comparative periods from the beginning of the ski season through Sunday, March 9, 2014, and for the similar prior year period through Sunday, March 10, 2013, adjusted as if Canyons, which transaction was entered into in May 2013, was owned in both periods. The reported ski season metrics do not include the results of Afton Alps and Mt. Brighton in either period. The following data is interim period data and subject to fiscal quarter end review and adjustments.
The Company announced ski season-to-date metrics for the comparative periods from the beginning of the ski season through Sunday, March 9, 2014, and for the similar prior year period through Sunday, March 10, 2013, adjusted as if Canyons, which transaction was entered into in May 2013, was owned in both periods. The reported ski season metrics do not include the results of Afton Alps and Mt. Brighton in either period. The following data is interim period data and subject to fiscal quarter end review and adjustments.
Highlights
- Season-to-date total lift revenue at the Company's eight mountain resorts, including an allocated portion of season pass revenue for each applicable period, was up approximately 4.9 percent compared to the prior year season-to-date period. Season-to-date- lift revenue at the Company's five mountain resorts in Colorado and Utah (calculated on the same basis) was up 11.5 percent.
- Season-to-date ancillary spending outpaced skier visitation, with ski school revenue up 6.8 percent and dining revenue up 1.7 percent at the Company's eight mountain resorts. Additionally, retail/rental revenue for resort store locations was up 4.8 percent. For the Company's Colorado and Utah resorts, season-to-date ski school revenue was up 10.6 percent, dining revenue was up 11.4 percent and retail/rental revenue for resort store locations was up 9.8 percent.
- Season-to-date total skier visits for the Company's eight mountain resorts were up 0.2 percent compared to the prior year season-to-date period. Total skier visits at our Colorado and Utah resorts grew at 7.1 percent compared to the prior year season-to-date period, while total skier visits at our Tahoe resorts declined approximately 20.4 percent, compared to the prior year season-to-date period.
Katz announced that his Board of Directors had decided to double the company’s quarterly dividend. The company declared a quarterly cash dividend on Vail Resorts' common stock of 41.5 cents per share, payable on April 16, 2014 to stockholders of record on April 1, 2014.
“The increase in our dividend demonstrates our confidence in our consistent and strong free cash flow generation and the stability of our business model, despite dramatic weather,” said Katz. “Our balance sheet remains very strong. We ended the quarter with $205.3 million of cash on hand and no borrowings under the revolver component of our senior credit facility and our Net Debt was 2.6 times trailing twelve months Total Reported EBITDA.”
Vail Resorts, Inc. | ||||||||||||||||||||||
Mountain Segment Operating Results | ||||||||||||||||||||||
(In thousands, except effective ticket price (“ETP”)) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Three Months Ended | Percentage Increase | Six Months Ended January 31, | Percentage Increase | |||||||||||||||||||
2014 | 2013 | (Decrease) | 2014 | 2013 | (Decrease) | |||||||||||||||||
Net Mountain revenue: | ||||||||||||||||||||||
Lift | $ | 195,357 | $ | 175,658 | 11.2 | % | $ | 195,357 | $ | 175,658 | 11.2 | % | ||||||||||
Ski school | 46,930 | 41,723 | 12.5 | % | 46,930 | 41,723 | 12.5 | % | ||||||||||||||
Dining | 32,602 | 29,826 | 9.3 | % | 40,066 | 36,199 | 10.7 | % | ||||||||||||||
Retail/rental | 85,717 | 83,748 | 2.4 | % | 114,616 | 110,473 | 3.8 | % | ||||||||||||||
Other | 31,050 | 30,786 | 0.9 | % | 52,018 | 49,600 | 4.9 | % | ||||||||||||||
Total Mountain net revenue | $ | 391,656 | $ | 361,741 | 8.3 | % | $ | 448,987 | $ | 413,653 | 8.5 | % | ||||||||||
Mountain operating expense: | ||||||||||||||||||||||
Labor and labor-related benefits | $ | 94,500 | $ | 83,684 | 12.9 | % | $ | 133,801 | $ | 117,978 | 13.4 | % | ||||||||||
Retail cost of sales | 33,989 | 35,244 | (3.6) | % | 50,856 | 51,435 | (1.1) | % | ||||||||||||||
Resort related fees | 19,528 | 17,396 | 12.3 | % | 20,631 | 18,385 | 12.2 | % | ||||||||||||||
General and administrative | 37,788 | 34,813 | 8.5 | % | 68,937 | 62,117 | 11.0 | % | ||||||||||||||
Other | 57,707 | 49,860 | 15.7 | % | 94,061 | 78,630 | 19.6 | % | ||||||||||||||
Total Mountain operating expense | $ | 243,512 | $ | 220,997 | 10.2 | % | $ | 368,286 | $ | 328,545 | 12.1 | |||||||||||
