Key insights
- Vail Resorts (MTN) stock dropped significantly after the company revised its full-year profit forecast downwards for the second time, citing historically poor snowfall in the western US. This 'unprecedented severity' of weather conditions led to a substantial decline in industry-wide visits and negatively impacted the company's third-quarter revenue and earnings. The lowered outlook suggests continued headwinds for the company, potentially impacting its stock recovery.
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Worries about a weaker outlook have ski operator Vail Resorts' stock facing a wipeout of its progress this year.
Shares of Vail (MTN) were down about 5% in recent trading, dragging them back into negative territory for the year, a day after the company lowered its full-year forecasts for the second time this year, citing "one of the worst snowfall years in history in the western U.S."1
CEO Rob Katz said the company saw "extremely unfavorable" weather persist in its fiscal third quarter, which negatively impacted demand for skiing and snowboarding, especially at its resorts in the Rocky Mountains. Vail Resorts said it now expects full-year profits of $128 million to $162 million, down from the previous range of $144 million to $190 million.2
Vail's outlook cut and lackluster third quarter could make it more difficult for the stock to recover, after a yearslong slide.
Katz said on the company's earnings call that industry-wide visits to ski resorts in the Rockies were down 24% over the past skiing season. Aside from COVID-19-related drops in visits, Katz said the previous worst performance over the last 40 years was an 8% drop in 2012, "which illustrates the unprecedented severity of the conditions and the anomaly we just experienced," per an AlphaSense transcript.
Vail reported third-quarter revenue of $1.2 billion, down 7% year-over-year and roughly in line with the analyst estimates, while earnings per share declined to $8.81 from $10.46 the same time a year ago, missing the Visible Alpha consensus by 16 cents.
With Tuesday's slump, Vail shares are down about 17% over the last 12 months.
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