Vail Resorts Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Shaun Kelley - BofA Global Research - Analyst : Hi, good afternoon. Thanks for taking my questions. Kirsten or Angela, can we just start with kind of the core conditions on the ground? Obviously, if we look at the season-to-date metrics provided, looks like visitation actually slowed a little bit in North America from what was provided the early season update. You've talked a lot about things improving from here or on balance. So could you just walk us through whether it's calendar and timing of spring breaks? We know Easter falls quite late. What kind of improvement do you need to see? Should we see it more on the visitation side or more on the mix side? Just maybe help level set expectations from here. And maybe a little bit of color about what you saw in February, just to help us kind of get a sense of how much things need to improve to hit the numbers from here. Thanks.

Question: Shaun Kelley - BofA Global Research - Analyst : Perfect. Thank you. And then maybe just as my follow-up and kind of to zoom out, obviously, in the prepared remarks, a bit more color than we've historically gotten as it relates to just some of the kind of key constituencies and a little bit of your message out there. Kirsten, you talked about guest satisfaction scores a little bit, probably about employee satisfaction where you're at with the front-line team members, lift lines. So as we zoom out, do you think there's room or the need for a little bit of a bigger, let's call it, pivot as it relates to sort of getting your narrative or telling your side of the story out there. Obviously, there's a lot happening around Park City, but it dates further than that as we think about employees, the mountain towns, and even the consumer, it feels like with where we are at on social media, can you just help us, very big picture, how are you thinking about that? Are there efforts are underway to maybe reengage some of those core constituencies and maybe tell your side of the story a little differently or a little bit better?

Question: Jeff Stantial - Stifel, Nicolaus & Company, Inc. - Analyst : Hey, good afternoon, Kirsten and Angela. Thanks for taking our questions. Maybe starting out here on some of the more recent demand trends that you've been seeing. We've been hearing that there's some softening in room rates and visitation trends at some of the US resorts that are closer to the Canadian border just as the consumer up there starts to respond to the proposed tariffs and some of the rhetoric coming out of Washington. I'm just curious, is this something that you have seen recently at any of the resorts, I guess, on either side of the border? And then similarly, if you could add some color on just how the broader international guests has behaved this season in light of all the FX, the political and the macro volatility? That would be helpful. Thanks.

Question: Jeff Stantial - Stifel, Nicolaus & Company, Inc. - Analyst : That's great. And you do have some destination visitation coming up next week. So hopefully, that helps. And then for my follow-up, just turning over to the Epic Pass launch for the upcoming season. It sounds like based on the commentary in the prepared remarks, that base of kind of core destination visitations, it does seem to be back on track this season -- and we'll kind of monitor and see how the remainder of the season plays out, but it does seem to be back on track, back to normalize. So my question is, is your expectation that pass sales in units get back to growth this year? Are there other kind of multi-year headwinds or puts and takes that we should be contemplating just as we think about trajectory of pass sales from here? Just any thoughts there would be great.

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Hi, good evening. Thanks so much. I maybe wanted to ask Shaun's first question on visitation just a bit differently. In January, you did say in the release that you expected improved performance compared to the season-to-date period. Obviously, you said February contracted; that was as you expected. But sitting here today, you are still saying you expect improved performance, and you didn't change the guide. So putting that together, is it fair to assume that you'd still expect visitation to improve from that down 2.5% today to something positive? I'm just thinking relative to the flattish in January? Or has what you're expecting for overall visitation maybe changed a bit and there's something else offsetting, maybe some conservatism that's allowing you to maintain the guide today?

Question: Megan Clapp - Morgan Stanley & Co. LLC - Analyst : Yeah. That's perfect. Thank you so much. And then maybe a follow-up on pass sales to understanding you'll have a bit more -- and you just launched them, and you'll have more perspective later in the season. But I guess if we just take a step back, you have had Epic Pass. You have a lot of data; you've been selling passes for maybe 15 years at this point, maybe a lot longer than that. And as you think about just some of the recent dynamics, I would just be curious to get your perspective as to how they may impact pass sales, given what you've seen historically. And the things I'm referring to are, there clearly does seem to be some heightened concern around the consumer. I think Delta said tonight, they're seeing softer demand. And you acknowledged the Park City strike, which had some impact on the guest experience. And then the offsetting is maybe -- conditions have been relatively strong, so there could be some pent-up demand. So as you look back historically kind of thinking about all those puts and takes, I'd just be curious whether you have a view on how some of those dynamics might play into pass sales as we enter the selling season in the next couple of months. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 10, 2025 / 9:00PM, MTN.N - Q2 2025 Vail Resorts Inc Earnings Call

Question: Laurent Vasilescu - BNP Paribas Exane - Analyst : Good afternoon. Thank you very much for taking my question. Kristen, I think it was mentioned in the prepared remarks that non-pass revenues increased about 18%, primarily driven by the East Coast visitations. I'm curious to know what really drove that growth if you can unpack that a little bit, and if you saw -- on the flip side, if you saw any impact from a negative perspective on the brutally cold weather that we faced over the last several months in the East Coast.

Question: Laurent Vasilescu - BNP Paribas Exane - Analyst : Okay. Helpful. And then I saw that rental revenues were down about 1%. The dining was up 11%, school was up 5%. Can you maybe unpack that a little bit like what's happening there? And how should we think about those three line items going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 10, 2025 / 9:00PM, MTN.N - Q2 2025 Vail Resorts Inc Earnings Call

Question: Patrick Scholes - Truist Securities, Inc. - Analyst : Thank you. Good afternoon, everyone. Can I just get an update on your current level of commitment to continuing to pay the dividend? Thank you.

Question: Patrick Scholes - Truist Securities, Inc. - Analyst : Okay. Thank you. And secondly, you talked about improving guest satisfaction score. One area that you called out was improvement in lift lines. Where do you -- what areas do you think need work? Let's leave Park City aside, and I did see Keystone labor was -- reached the contract, so that looks good. But what are some of your, should we say, pain points that you would like to work on or you are working on and would like to see improved, especially on customer satisfaction? Thank you.

Question: Chris Woronka - Deutsche Bank Securities Inc. - Analyst : Hey. Good afternoon, Kirsten and Angela. I wanted to ask about long-term structural margins. I know you're guiding resort to just under 29% this year. I know it was in terms of 30s prior to COVID. What has to happen to get back there? Is it a cost issue? I know you talked a lot about the efficiency plan, so maybe that's most of the answer. But is there anything on pricing or ancillary or just the way you're running business on the mountain that needs to happen to get there? Thanks.

Question: Chris Woronka - Deutsche Bank Securities Inc. - Analyst : Okay. Very helpful. Thanks, Angela. As a follow-up, I did a lot of questions about the season -- the new pass launch for next year. I know 7% kind of was surprising. My question is pretty simple. Is that based on just some kind of algo? Can we read back into your internal expectations for cost increases? Or is that more of a -- just trying to get a sense for what the -- if you're willing to share any color on kind of the formula behind that, would be great. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 10, 2025 / 9:00PM, MTN.N - Q2 2025 Vail Resorts Inc Earnings Call

Question: Ben Chaiken - Mizuho Securities USA, LLC - Analyst : Just wanted to touch back on Park City Canyons. Obviously, guests who were impacted by the strike received a discount on future passes. Understanding it's early, is there any color regarding retention statistics or success of this program? And then on a gross basis, is there any way to quantify the impact of this year's EBITDA? I know the cost will be allocated to FY24-FY25? Thanks.

Question: Ben Chaiken - Mizuho Securities USA, LLC - Analyst : Okay. Understood. And then this is the first real season of Epic Gear. Are there any financial or customer usage statistics you can share to judge the success of the new platform? And then is '25-'26 still kind of like a beta year or fully rolled out? And then lastly, is there anything you're changing next year based off of what you experienced this year? Thanks.

Question: David Katz - Jefferies LLC - Analyst : Hi, everyone. Thanks for taking my questions. I wanted to ask about Europe and sort of how you're progressing there, what kind of traffic you're seeing. What are you, if any, seeing from -- the US obviously becomes somewhat of a trend as a cost matter with people traveling to Europe. Just some insight there would help, please.

Question: David Katz - Jefferies LLC - Analyst : Right. And if I can just follow that up, Kirsten, you talk about the size of the mountain. Patrons tend to also, I believe, spend less or at least pay less for lift tickets. Can you just shed some light on any sort of pricing acceptance or resistance or kind of what you're seeing specifically around that part of it?

Question: Matthew Boss - J.P. Morgan Securities LLC - Analyst : Great, thanks. So Kirsten, could you elaborate on real-time historical demand indicators that you're watching more so to gauge the current health of your core consumer? And then just multi-year, I guess what do you see as a normalized underlying revenue growth rate for the business, maybe after the impact from the destination shifts as well as the impact from normalization?

Question: Arpine Kocharyan - UBS Securities LLC - Analyst : Hi. Thanks for taking my question. I wanted to go back to EBITDA guidance for just one second. So you mentioned some relative FX impact on EBITDA, so at midpoint resort EBITDA is unchanged. But I was wondering if you could give a bit more color on puts and takes for the top end of range? It seems like that came down more than the FX impact? And then I have a quick follow-up.

Question: Arpine Kocharyan - UBS Securities LLC - Analyst : Great. Thank you. That's helpful. And then I was wondering, would it be possible to talk kind of more broadly about labor cost pressures. This is a question that we get often. Is it possible to quantify what you were expecting a quarter ago, and how those puts and takes have changed in light of some of the labor agreements you've made throughout the quarter? Kind of that incremental pressure on EBITDA this year and more importantly, sort of run rating into '26, would you say there is a material impact in your outlook as you look at the cost basis on a run rate basis outside of the $100 million of cost savings?

Question: Brandt Montour - Barclays Capital Inc. - Analyst : Hello, everybody. Thanks for squeezing me in here. I have a question on the pass prices. Kirsten, you were talking about a 7% increase. When I look at the all resorts Day Pass, it looks like it went up well in advance of 7%, right? Something like 25% to 30%. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 10, 2025 / 9:00PM, MTN.N - Q2 2025 Vail Resorts Inc Earnings Call Can you -- first of all, am I looking at the wrong thing, because that doesn't seem to be consistent with the 7%. But I guess, more importantly, is it a tactical shift with regards to day pass prices? Because I think the follow-on question is -- I would think it's a pretty elastic pass. When you cut prices in '21, you saw incredible increase in units. And so I'm curious if you guys have any concern about elasticity on the downside for demand If you are, in fact, raising the price of the day passes at that sort of rate?

Question: Brandt Montour - Barclays Capital Inc. - Analyst : I appreciate that. So then maybe I'll just ask the same question in a different way. 7% puts the full Epic Pass at well over $1,000. That's going to be sort of a record, of course, obviously. It was below $1,000 back in '21, but you've come a long way since then. Again, same question because there was a lot of demand elasticity, you cut the price. Are you expecting any sort of elasticity in the other direction?