Vail Resorts, Inc. MTN reported fourth-quarter fiscal 2020 results, wherein the top and the bottom line not only missed the Zacks Consensus Estimate but also declined on a year-over-year basis.
In the quarter under review, the company’s reported loss of $3.82 per share was wider than the Zacks Consensus Estimate of a loss of $3.56. In the prior-year quarter, the company had reported a loss of $2.22 per share.
Quarterly revenues came in at $77.2 million missed the consensus mark of $136 million by 43%. Moreover, the top line fell 68.4% on a year-over-year basis. The downside can be attributed to dismal performance by the Mountain segment and Lodging segments.
Vail Resorts, Inc. Price, Consensus and EPS Surprise
Vail Resorts, Inc. price-consensus-eps-surprise-chart | Vail Resorts, Inc. Quote
Segment Results
Vail Resorts generates revenues from two segments — Resort (99.9% to net revenues in fourth-quarter fiscal 2020) and Real Estate (0.1%). Under the Resort segment, the company has Mountain and Lodging services, and other (contributing 80% to net revenues in fiscal fourth quarter) as well as Mountain and Lodging retail and dining (19.9%).
Meanwhile, Vail Resorts has two reporting segments — Mountain and Lodging.
The Mountain segment reported revenues of $48.8 million in the quarter under review, down 69% year over year due to lower visitation associated with the closure of its North American destination mountain resorts and regional ski areas because of the COVID-19 outbreak, partially offset by incremental revenues from Peak Resorts.
The segment’s EBITDA amounted to ($94.4) million, down 44.5% from ($65.3) million in the prior-year quarter. Meanwhile, operating expenses at the Mountain segment totaled $143.6 million, down 35.6% year over year.
Lodging net revenues in the reported quarter were $28.4 million, down 67.2% year over year primarily due to the closure of North American lodging properties as a result of the pandemic. Under the segment, EBITDA declined 241.2% to ($8.2) million from the prior-year quarter.
Meanwhile, operating expenses at the Lodging segment contracted 54.7% year over year to $36.6 million.
Operating Results
Vail Resorts reported EBITDA of ($103.8) million in the quarter under review compared with ($60.5) million in the prior-year quarter. The decline was primarily attributed to the closure of its destination mountain resorts and regional ski areas due the coronavirus pandemic.
Resort operating expenses totaled $180.1 million, down 40.7% year over year. Meanwhile, total segmental operating expenses contracted 40.6% year over year to $181.4 million.
Balance Sheet
Cash and cash equivalents as of Jul 31, 2020, totaled $391 million, up from $108.9 million in the year-ago period.
Net long-term debt amounted to $2,387.1 million at the end of the quarter, up from $1,527.7 million at the end of the prior-year quarter.
As of Aug 31, 2020, the company had total cash and revolver availability of approximately $953 million. This includes $360 million of cash in hand, $419 million of U.S. revolver availability under the Vail Holdings Credit Agreement and $174 million of revolver availability under the Whistler Credit Agreement.
Nonetheless, the company stated that it has sufficient liquidity to fund its operations for up to 2021/22 ski season, even if resort shutdowns are extended.
Fiscal 2020 Highlights
Fiscal 2020 diluted earnings per share came in at $2.42 compared with $7.32 reported in the prior year.
Total revenues for fiscal 2020 came in at $1,963.7 million compared with $2,271.6 million in fiscal 2019.
Total segment operating expenses for fiscal 2020 was reported at $1,466.4 million, compared with $1,571.7 million in fiscal 2019.
Fiscal 2021 Guidance
Owing to the uncertainties revolving around the coronavirus pandemic, the company has refrained from providing the fiscal 2021 guidance.
Zacks Rank & Key Picks
Vail Resorts currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Zacks Consumer Discretionary sector include Brunswick Corporation BC, TEGNA Inc. TGNA and Mattel, Inc. MAT. Brunswick sports a Zacks Rank #1 (Strong Buy), while TEGNA and Mattel carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Brunswick has a trailing four-quarter earnings surprise of 39.9%, on average.
TEGNA has a three-five-year earnings per share growth rate of 10%.
Mattel’s 2020 earnings are expected to rise 50%.
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