Vail Resorts(US:MTN)2021-06-08 13:54Financial Data and Key Metrics Changes - Net income attributable to Vail Resorts was $274.6 million, or $6.72 per diluted share for Q3 fiscal 2021, compared to $152.5 million or $3.74 per diluted share in the prior year, representing a significant increase [13] - Resort reported EBITDA was $462.2 million in Q3 fiscal 2021, up from $304.4 million in the same period last year, indicating strong operational performance [13] - Resort-reported EBITDA margin for Q3 was 52%, exceeding the prior year period of 43.9% and fiscal 2019's 50.2%, reflecting effective cost management [15] Business Line Data and Key Metrics Changes - Total visitation at U.S. destination mountain resorts and regional ski areas for Q3 was down only 3% compared to Q3 fiscal 2019, indicating recovery in domestic visitation [8] - Whistler Blackcomb's total visitation declined nearly 60% compared to Q3 fiscal 2019 due to border closures and early resort closure [9] - Ancillary lines of business, particularly food and beverage and ski school, continued to be negatively impacted by COVID-19-related capacity constraints [10] Market Data and Key Metrics Changes - Strong North American pass sales growth for the 2020-2021 ski season, with pass product sales through June 1, 2021, increasing approximately 50% in units and 33% in sales dollars compared to the 2019-2020 season [22] - Epic Australia pass sales were up approximately 43% in units through June 1, 2021, compared to the same period in 2019, indicating strong demand in the Australian market [26] Company Strategy and Development Direction - The company is focused on significant investments in resort infrastructure and guest experience, including a $35 million capital plan for the season [30] - A commitment to raising minimum entry wages to $15 per hour in key states, reflecting a focus on talent acquisition and retention [31] - The company remains disciplined in capital allocation, prioritizing reinvestment in the business and strategic acquisitions [64][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong cash flow generation and stability of the business model, with total cash and revolver availability of approximately $2 billion as of April 30, 2021 [18] - The outlook for fiscal 2021 anticipates net income between $93 million and $139 million, with resort-reported EBITDA expected to be between $530 million and $570 million [16] - Management remains cautious about potential impacts from COVID-19-related disruptions but is optimistic about demand trends and operational stability [17] Other Important Information - The company is not reinstating dividends this quarter but remains committed to returning capital to shareholders when appropriate [19] - The company is actively monitoring labor market conditions and is hopeful about hiring foreign talent as borders reopen [91] Q&A Session All Questions and Answers Question: Insights on pass sales and product mix - Management explained that the effective price statistic reflects a 10% decrease while units increased by 50%, leading to a 33% revenue increase, with a notable trade-up from lower-priced to higher-priced products [35][36] Question: Balance of the season and sales cadence - Management indicated that historically, more pass sales occur after Memorial Day, and this year’s sales will be compared to last year's results, which were influenced by credits issued to renewing pass holders [37][40] Question: M&A opportunities and geographic considerations - Management confirmed that current pass sales data supports their M&A strategy, with a focus on selective acquisitions in compelling markets [44][45] Question: New pass holders and customer demographics - Management noted strength across all segments of new pass holders, including lapsed pass holders and new customers, but did not provide specific demographic breakdowns [50][51] Question: Competitive landscape and market share - Management expressed confidence in their competitive position but acknowledged the difficulty in assessing market share dynamics without insight into competitors' performance [62][63] Question: Labor market challenges and hiring strategies - Management acknowledged the challenging labor market but emphasized their commitment to improving recruitment efforts and increasing wages to attract talent [91][92] Question: Ancillary services and margin impacts - Management highlighted that margin improvements were driven by disciplined cost management and strong performance in high-margin businesses like lift tickets [99][100]