Vail Resorts, Inc. (NYSE:MTN) put out fiscal Q2 results on Monday afternoon, with inline results and no guidance. This last point is the important part: the fact that the company withdrew any attempt at predicting the near-term future tells you all you need to know about what they are seeing as the coronavirus takes a firm hold on consumer behavior in the US.
However, management did say that FY20 EBITDA guidance would've been ~3% below prior guidance (due to poor weather in the Pacific NW region, along with soft international demand) excluding the impact of the coronavirus. But demand has been clearly impacted over the past week. As such, the company is deferring any dividend (4% yield) raise until June as a result of the uncertainty despite a solid balance sheet.
For those with a long-term mindset, the action in MTN right now probably exemplifies how the coronavirus scare is ultimately creating powerful value opportunities. This is a very well-run company that hasn’t really made any missteps. And the force that is ultimately responsible for its dramatic 30% implosion in recent weeks is something that will subside over time.
Vail Resorts, Inc. (NYSE:MTN) operates mountain resorts and urban ski areas in the United States.
Its Mountain segment operates Vail Mountain, Breckenridge Ski, Keystone, Beaver Creek, and Crested Butte Mountain resorts in Colorado; Heavenly Mountain, Northstar, and Kirkwood Mountain resorts in the Lake Tahoe area of California and Nevada; Mount Sunapee Resort in New Hampshire; Park City resort in Utah; Stowe and Okemo Mountain Resort in Vermont; and Stevens Pass Mountain Resort in Washington.
This segment also operates Whistler Blackcomb in Canada; and Perisher Ski Resort, and Falls Creek and Hotham Alpine Resort in Australia, as well as 3 urban ski areas, such as Afton Alps in Minnesota, Mount Brighton in Michigan, and Wilmot Mountain in Wisconsin.
Its resorts offer various winter and summer recreational activities, including skiing, snowboarding, snowshoeing, snow tubing, sightseeing, mountain biking, guided hiking, zip lines, challenge ropes courses, alpine slides and mountain coasters, children's activities, and other recreational activities; and ski and snowboard lessons, equipment rental and retail merchandise services, dining venues, private club operations, and other winter and summer recreational activities. This segment also leases its owned and leased commercial space to third party operators; and provides real estate brokerage services.
The company's Lodging segment owns and/or manages various luxury hotels and condominiums under the RockResorts brand, and other lodging properties; various condominiums located in proximity to the company's mountain resorts; destination resorts; and golf courses, as well as offers resort ground transportation services. This segment operates approximately 5,500 owned and managed hotel and condominium units. Its Real Estate segment owns, develops, and sells real estate properties in and around the company's resort communities.
In total, over the past five days, shares of the stock have dropped by roughly -12% on above-average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -26%.
Our MTN Earnings Summary:
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Vail Resorts reports Q2 results, reports revs in-line, company withdraws FY20 guidance
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Reports Q2 (Jan) earnings of $5.04 per share, may not compare to the S&P Capital IQ Consensus of $5.44; revenues rose 8.8% year/year to $924.6 mln vs the $921.06 mln S&P Capital IQ Consensus.
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Resort Reported EBITDA was $378.3 mln for 2Q20, which included $1.9 mln of acquisition and integration related expenses and approximately $1 mln of favorable foreign exchange as a result of the U.S. dollar weakening over the prior year compared to the Canadian dollar.
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Company withdraws FY20 guidance
Our MTN Conference Call, Analyst, and Research Notes:
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"Given the uncertainty surrounding the impact of the coronavirus on the broader U.S. travel market and any specific impact to the performance of our Company, we are not issuing guidance at this time for fiscal 2020 and are withdrawing our previous guidance issued on January 17, 2020. In the week ended March 8, 2020, we saw a marked negative change in performance from the prior week, with destination skier visits modestly below expectations. We expect this trend to continue and potentially worsen in upcoming weeks."
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FY20 EBITDA guidance would've been ~3% below prior guidance (due to poor weather in the Pacific NW region, along with soft international demand) excluding the impact of the coronavirus. But demand has been clearly impacted over the past week.
