Vail Resort’s Strong Recovery In Fiscal 2023

Vail Resorts, Inc. reported results for its fourth quarter and fiscal year ended July 31 outperformed results from the prior year primarily due to the impact of COVID-19 and related limitations and restrictions on results for the previous year. 

Season-to-date season pass sales are ahead 7 percent, and the company provided a favorable outlook for its current fiscal year.

Highlights
Net income attributable to Vail Resorts, Inc. was $347.9 million for fiscal 2022 compared to net income attributable to Vail Resorts, Inc. of $127.9 million for fiscal 2021. The increase is primarily due to the more significant impact of COVID-19 and related limitations and restrictions on results in the prior year.

Resort Reported EBITDA was $836.9 million for fiscal 2022, compared to Resort Reported EBITDA of $544.7 million for fiscal 2021. The increase is primarily due to the more significant impact of COVID-19 and related limitations and restrictions on results in the prior year.

Pass product sales through September 23, 2022 for the upcoming 2022/23 North American ski season increased approximately 6 percent in units and around 7 percent in sales dollars compared to the prior year through September 24, 2021. 

Pass product sales were adjusted to include pass sales for the recently acquired Seven Springs, Hidden Valley and Laurel Mountain resorts (“Seven Springs Resorts”) in both periods and to eliminate the impact of changes in foreign currency exchange rates by applying current U.S. dollar exchange rates to both current and prior period sales for Whistler Blackcomb.

The company provided its outlook for fiscal 2023 and expects Resort Reported EBITDA to be between $893 million and $947 million, including an estimated $4 million of acquisition and integration-related expenses specific to the Seven Springs Resorts and Andermatt-Sedrun. 

Fiscal 2023 guidance, among other assumptions described below, assumes a continuation of the current economic environment, normal weather conditions and no material impacts associated with COVID-19 for the 2022/23 North American and European ski season or the 2023 Australian ski season.

The company announced a quarterly cash dividend of $1.91 per share of Vail Resorts common stock, payable on October 24, 2022 to shareholders of record as of October 5, 2022.

The company announced details on its calendar year 2023 capital plan, totalling approximately $180 million to $185 million, excluding $1 million of one-time investments related to integration activities and $10 million of deferred capital associated with the delayed Keystone and Park City lift projects. 

Including these one-time investments, the company’s total capital plan for the calendar year 2023 is expected to be approximately $191 million to $196 million. It primarily focuses on new and replacement lifts to increase uphill capacity and customer experience.

On August 3, 2022, the company closed on its purchase of a majority stake in Andermatt-Sedrun, marking its first strategic investment in, and opportunity to operate, a European ski resort.

Commenting on the company’s fiscal 2022 results, Kirsten Lynch, chief executive officer, said, “We are pleased with our overall results for the year which highlight the stability and strength of our business model. As expected, results for the year significantly outperformed results from the prior year, primarily due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior year.

“Despite the challenging early season conditions through the holiday period, staffing challenges, and impacts related to COVID-19, results exceeded our original expectations for the year driven by the stability from our advance commitment pass products with approximately 72 percent of skier visitation at our North American resorts coming from pass product holders, strong destination guest visitation including demand for lift tickets, and an improved guest experience from January through the remainder of the season, demonstrating strong underlying demand for the experience at our resorts. We had particularly strong destination visitation this year, and growth in visitation primarily occurred during off-peak periods. Throughout the North American ski season, our ancillary businesses continued to be capacity constrained by staffing, and in the case of dining, by operational restrictions associated with COVID-19.”

Regarding the company’s fiscal 2022 fourth-quarter results, Lynch said, “Performance in the fourth quarter of fiscal year 2022 improved significantly from the prior year driven by strong demand and visitation at our Australian resorts and the continued recovery in our North American summer operations following the start of the COVID-19 pandemic. Our Australian resorts experienced record visitation, driven by strong demand following two years of COVID-19-related disruptions, continued momentum in advance commitment pass product sales following the addition of Hotham and Falls Creek in April 2019, and favorable early season conditions that continued throughout the quarter.”

Commenting on guidance, Lynch said, “As we head into fiscal year 2023, we are encouraged by the strength in advance commitment product sales and our continued focus on enhancing the guest and employee experience while maintaining cost discipline. Our employee investment of approximately $175 million to return to full staffing levels and operational footprints, along with our expected capital investment of over $300 million in the calendar year 2022, is expected to further elevate the guest experience this season and increase the capacity of our resorts.

“Despite facing broad cost inflation and after incorporating our industry-leading wage investment, we expect meaningful growth for fiscal 2023 relative to fiscal 2022 and strong Resort EBITDA margin. Our guidance for net income attributable to Vail Resorts, Inc. is estimated to be between $321 million and $396 million for fiscal 2023. We estimate Resort Reported EBITDA for fiscal 2023 will be between $893 million and $947 million. We expect the operations of the Seven Springs Resorts and Andermatt-Sedrun to contribute approximately $22 million of Resort Reported EBITDA in fiscal year 2023, which is an incremental $4 million of Resort Reported EBITDA compared to fiscal year 2022, excluding acquisition and integration-related expenses. Acquisition and integration-related expenses are expected to be an estimated $4 million in fiscal year 2023 associated with the resort acquisitions. We estimate Resort EBITDA Margin for fiscal 2023 to be approximately 31.0 percent using the midpoint of the guidance range.

“The guidance assumes a continuation of the current economic environment, normal weather conditions, and no material impacts associated with COVID-19 for the 2022/2023 North American and European ski season or the 2022 and 2023 Australian ski seasons. The guidance also assumes a return to full staffing levels and operational footprints consistent with the expectations shared in the Company’s March 2022 Investor Conference Presentation. The guidance assumes an exchange rate of $0.77 between the Canadian dollar and U.S. dollar related to the operations of Whistler Blackcomb in Canada, an exchange rate of $0.70 between the Australian dollar and U.S. dollar related to the operations of Perisher, Falls Creek and Hotham in Australia, and an exchange rate of $1.02 between the Swiss franc and U.S. dollar related to the operations of Andermatt-Sedrun in Switzerland.”