Vail Resorts, Inc. reported Retail/Rental revenues at its more than 165 specialty stores dipped in the quarter ended Oct. 31 due primarily to lower results from pre-season ski sales, which had produced record results a year earlier.
Retail/rental sales, which include the results at more than 165 specialty stores operated by its Specialty Sports Ventures (SSV) unit, dipped $200,000, or 0.9 percent, to $26.7 million in the quarter, compared to $27.0 million in the first quarter of fiscal 2011-12. Retail cost of sales increased 4.3 percent to $16.2 million or 60.6 percent of Retail/Rental revenue, compared to 57.4 percent a year earlier.
MTN attributed the decline primarily to lower sales at its stores along the Colorado front range and at its Any Mountain chain in the San Francisco Bay area. The declines were partially offset by an increase in retail sales generated by the company’s on-line retailer, O2gearshop.com, and improved retail sales at mountain resort stores.
The company said higher visitation to its Colorado resorts during the quarter helped drive revenue growth from summer activities, lodging and dining. The lodging business benefited from increased group and wedding business at Keystone, as well as the addition of a new national park property, Flagg Ranch. This was partially offset by lower results at the Grand Teton Lodging Company summer national park business, which was impacted by wildfires.
As of Dec. 2, 2012, sales of season passes for the 2012/2013 ski season were up approximately 8 percent in sales dollars and 5 percent in units as compared to record sales through the similar period of the 2011/2012 ski season. Typically season pass sales represent 40 percent of MTN’s annual lift ticket sales.
Lodging bookings through MTN’s central reservations systems for the winter season are down slightly from the same time last year. While numerous storms have dumped heavy snowfall at MTN’s three resorts in the Lake Tahoe area, conditions at its resorts in Colorado remained unusually dry and warm through November.
MTN CEL Rob Katz opined that soft demand was more weather than economics related, particularly given memory of last winter when an unprecedented lack of snow drove down visits to its resorts 12 percent.
“With a little bit of a drier early season, we're not that surprised to see a little bit of sluggishness in those bookings,” Katz said. “We're also quite confident that as we look at the entire season, that with normal weather patterns coming back that” bookings will resume to their summer growth rates.
Regardless, Katz said meeting the company’s prior guidance for EBITDA growth of 27 to 32 percent will be difficult.
