Vail Resorts Inc. reported retail sales increased at its stores in the San Francisco area and in and around its three resorts in Lake Tahoe in the fiscal third quarter ended April 30 thanks to a storm in early April that sent Californians flocking to the slopes.
The results, which come amid the Sierra Nevada’s worst drought in decades, contributed to double-digit sales growth at Specialty Sports Ventures (SSV), which operates Vail Resort’s (MTN) more than 185 retail and rental stores.
MTN reported retail sales grew by $7.2 million, or 11.2 percent, to $47.4 million due primarily to the acquisition of news stores, including Hoigaard’s near Minneapolis and stores located in Canyons, a resort in Deer Park, UT the company began leasing last year. Store sales increased not only at its existing stores in or near its resorts in Colorado and along the Colorado’s front range, but also at those in and around its Lake Tahoe resorts and at the Any Mountain chain in the San Francisco Bay Area. Sales growth was partially offset by the closing of 02gearshop.com, an online store acquired in 2012 but shuttered by SSV early this year as part of a new e-commerce strategy. Rental revenues increased by $2.9 million, or 11.7 percent, to $26.7 million compared with the fiscal third quarter of 2013. Gross profit for the combined retail/rental business increased 13.9 percent to $48.4 million, resulting in gross margin of 65.6 percent, up 150 basis points from a year earlier.
MTN reported visitation to its resorts grew 11.2 percent during the quarter, reflecting a 5.2 percent increase at the Colorado resorts (Vail, Beaver Creek, Breckinridge and Keystone) and the addition of the Canyons in Park City, UT. Visitation at MTN’s Lake Tahoe resorts (Heavenly, Northstar and Kirkwood) declined just 4.4 percent after early April snowstorms sent Californians racing to the slopes. That marked a dramatic rebound from the previous quarter, when visitation plunged 27.7 percent.
MTN’s lift revenue, excluding season pass revenue, increased 14.5 percent, or by $20.9 million, as increased ticket sales in Colorado and the addition of Canyons more than offset a drop at Tahoe resorts compared with a year earlier. Season pass sales increased 22.3 percent, or by $15.9 million, during the quarter and 14 percent in unit terms. More than half the growth came from destination guests, who spend significantly more on lessons, rentals, dining and shopping than drive-in guests. As of May 27, sales of season passes for the 2014/15 winter season were running 20 percent ahead of last year’s record level.
MTN upped its guidance for Fiscal 2014 Resort Reported EBITDA to 11 to 13 percent growth from 6 to 10 percent growth forecast March 12. The figure represents expected results from the companies ski lift, ski school, dining, retail/rental and lodging businesses, but excludes results from its real estate segment.
SSV’s stores are located either within the company’s 12 resorts or in metro areas that are within driving distance of those resorts, including Denver, Minneapolis, Salt Lake City and San Francisco. The company acquired Afton Alps in Minnesota and Mt. Brighton in Michigan in 2013 and also owns the Grand Teton Lodge Company in Jackson Hole, WY. The stores sell and rent skis, snowboards and other snow sports gear in the winter and cycling, racquet, golf, outdoor furniture other seasonal sporting goods in the summer.