Vail Resorts Inc Q4 2024 Earnings Call Transcript

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

Question: Shaun Kelley - Bank of America - Analyst : Hi, good afternoon. Hi, Kirsten. Hi, Angela. Hi Shaun. Maybe we could just start with, we're getting a few questions obviously, there's a lot going on in the guidance and wanted to make sure I think we were all level set. So, Angela, this may be appropriate for you. But, I think that the punch line we're trying to get to it and I think some investors trying to get to is, if we start at last year's guidance and outlook, which at the midpoint was around $940 million. Could you help us think about that versus the starting point as we look at this fiscal year before we kind of get into the transformation program because to us, it does imply a pretty big difference. And with weather normalizing, I think what we're trying to kind of understand is how much of that or with -- if in a normal weather scenario, how much of that difference is from consumer normalization, how much is just from maybe run rate cost inflation in the business and how much is from Australia or any other one timers that we need to think about? Thanks.

Question: Shaun Kelley - Bank of America - Analyst : Thanks Angela.

Question: Shaun Kelley - Bank of America - Analyst : And Kirsten, that was sort of my follow up. If we could just build off that, you did have a little bit of a comment around summer. So what's kind of giving you, maybe that outlook or that pause as it relates to any continuation there? Is that what you saw in summer? Is it any behaviorally on the past? It looks like things got a little bit better. But, maybe you could also sprinkle in your thoughts on just past sales for the remainder of the open sales period.

Question: Shaun Kelley - Bank of America - Analyst : Thank you very much.

Question: Jeffrey Stantial - Stifel - Analyst : Hey, great, thanks. Good afternoon, Kirsten, Angela, thanks for taking our questions. Maybe starting off here on the announced resource efficiency transformation plan. Kirsten can you just maybe add a bit of color to which of the functions you're planning to switch from a resort or a regional level to more of the global shared services model? I mean, if you do think about those three different pillars that you outlined in the prepared remarks or really, however, you want to categorize the plan changes? Just how do you think about maybe the relative weighting of each in terms of contribution to that $100 million all in cost savings? Thanks.

Question: Jeffrey Stantial - Stifel - Analyst : Great. No, that answered that question amazingly, thank you for all that detail. And then maybe for my follow up, but I'd love to ask Shaun's question, but maybe just a slightly different way, a lot of puts and takes kind of going into the guidance, everyone's trying to parse out some of these one-time head wins. I think, maybe there's just one variable that everyone had it, it might help solve the equation here and that, that's really on the weather piece of the impact of last season. So, is there any way you could help quantify for us, how much the year on your benefit from normalized weather conditions is embedded in guidance and maybe if not a firm number, maybe I'll phrase it as, it was weather more meaningful last season, relative to the demand normalization that you saw or was it the other way around. Just, however you could kind of frame that I think would help a lot. Thanks.

Question: Jeffrey Stantial - Stifel - Analyst : Perfect. That's extremely helpful. Thank you, Angela. I'll pass it on. Thanks for all the color.

Question: Megan Alexander - Morgan Stanley - Analyst : Hey, good afternoon. Thanks so much for taking your questions. I maybe wanted to just start by trying to see if we could tie some of your comments earlier together. And I guess it's really just can you share how you're thinking about visitation is, you talked about, I guess two of the three factors being, normalization and pass units being down, which maybe those are one factor in total. But both of those seem to be a headwind to visitation. Again, offset by the fact that you get some recovery on weather. So, perhaps it could suggest that visitation is down again. Is that how you're thinking about it or, am I missing something is the impact from weather, more meaningful than the prior to impact.

Question: Megan Alexander - Morgan Stanley - Analyst : OK. That's helpful.

Question: Megan Alexander - Morgan Stanley - Analyst : Right, okay. That makes sense. And then maybe a shifting gears just a little bit more to the transformational resource efficiency efforts that you announced today. And I acknowledge that, you did spend a considerable amount of time kind of prepping us for this at the Investor Day earlier this year. But just thinking about this, I think in many cases, when we as analysts and investors sometimes hear about resource efficiency, cost savings effort that can perhaps be because, growth is slowing and company may be entering a more mature state. But in reading, listening to your prepared remarks and reading the commentary on it. It seems like, you're saying that it's intended to set you up for the next phase of growth. So is the read there as simple as you're trying to improve operating leverage, improve free cash flow conversion, to be able to continue to execute on the strategic acquisition plan or is it not as simple as that just trying to understand a little bit more about kind of the decision making, that kind of went into this announcement? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 26, 2024 / 9:00PM, MTN.N - Q4 2024 Vail Resorts Inc Earnings Call

Question: Megan Alexander - Morgan Stanley - Analyst : Got it. That's helpful. Thank you so much.

Question: Brandt Montour - Barclays - Analyst : Good evening, everybody. Thanks for taking my questions. So I wanted to start off on demand and just sort of drill in a little bit to some of your comments, Kirsten. Industry level ski visits, you kind of make it sound like we're in this normalization period on the peak post COVID or in peak COVID years. When I look at the ski visits on the average over the last couple of years, those North American ski visits had run 10% to 15% above the average of last cycle, right, and that was on poor weather. I just want to get a sense of where you think we're going, if we're going all the way back to the average levels of the last cycle. And really kind of like why, like do you see things in your bookings or your surveys or your general conversations with folks, and just sort of the nuts and bolts of what sort of gives you the sense we're going backwards, I guess, and where we could bottom out, I guess, that's probably the best way to answer -- ask it.

Question: Brandt Montour - Barclays - Analyst : Okay, thanks for that. And then a second question is on M&A at the Investor Day. The conversation was around the Alps and achieving some sort of -- achieve a network effect over there which would be an attractive opportunity. I think you were quoted in an article recently on Bloomberg about achieving diversification with M&A and obviously we know Australia just had a really tough season. It was really about weather and so I guess the question, has your M&A strategy altered at all, has it shifted more defensive, i.e., diversification from offensive? And does that change sort of your return targets or underwriting hurdles when you think about what you'd really be willing to pay for premier assets in Europe?

Question: Brandt Montour - Barclays - Analyst : Thank you.

Question: Patrick Scholes - Truist Securities - Analyst : Hi. Good afternoon, good evening.

Question: Patrick Scholes - Truist Securities - Analyst : First question is have you been contacted directly by either the FTC or the DoJ in relation to the Arapahoe Basin matter? I asked this because the Epic Pass and the Ikon Pass resorts in Colorado, they account for about 80% of visitation in the state. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 26, 2024 / 9:00PM, MTN.N - Q4 2024 Vail Resorts Inc Earnings Call But Alterra only owns two resorts in the state yet looks like their acquisition of just a basin is being held up now for going on about eight months. Thank you.

Question: Patrick Scholes - Truist Securities - Analyst : I'm afraid I know that the answer to this follow up question. But do you think there's any reasonable chance of some sort of action involving Bill Resort or what might limit your ability to purchase more resorts or maintain your existing resorts in the US?

Question: Patrick Scholes - Truist Securities - Analyst : Do you think if there was some sort of contact from the FTC or Department of Justice that could cause a chance of limiting your ability to continue to own your existing resorts or continue to purchase resorts in the US?

Question: Patrick Scholes - Truist Securities - Analyst : Okay, thank you. Can I get one more question?

Question: Patrick Scholes - Truist Securities - Analyst : Okay. They're out -- there's out there the updated forest service master plan. I think it has the Dale Mountain 2024 master plan list network upgrade proposal. It looks pretty all encompassing. Can you give us any thoughts about potential timing or is this something we might see down the road? 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. SEPTEMBER 26, 2024 / 9:00PM, MTN.N - Q4 2024 Vail Resorts Inc Earnings Call

Question: Patrick Scholes - Truist Securities - Analyst : Okay.

Question: Patrick Scholes - Truist Securities - Analyst : Thank you.

Question: David Katz - Jefferies - Analyst : Evening everyone. Thanks for taking my questions, covered a lot of territory and appreciate all of the detail. Just two follow ups. With respect to the corporate reductions if you could give us just a little more color -- excuse me, what kinds of functions you're reducing is that elements that sort of reach out to the parks level from corporate, are they -- is it corporate development in some way that may be executing acquisitions? What kinds of things are you shrinking? And then I have one quick follow up in another direction. Thanks.

Question: David Katz - Jefferies - Analyst : Perfect. And this may sound like a snarky question, but I really intended to have zero snark in it whatsoever. But can we just talk for a moment about sort of normal weather, right. Does normal weather mean that there's a certain number of days that are impacted because weather just happens at ski resorts, or like what is -- how do we sort of think about normal weather? And is there a new normal that we may be -- should be thinking about?

Question: David Katz - Jefferies - Analyst : It does help. Thank you very much. Good luck.

Question: Ben Chaiken - MIzuho Group - Analyst : Hey, just one question. Thanks for squeezing me in. Understanding that last year had difficult weather, as you think about and reflect on the importance of the single day customer as it pertains to your season pass sales funnel for future periods, does that make you think about the single day pricing or promotion mechanism entered any differently? And then I guess related are you doing anything this year to support this channel in order to drive past sales in the future? Thanks.

Question: Ben Chaiken - MIzuho Group - Analyst : Yeah, very helpful. And then I guess it's related if I caught it correctly, I think you mentioned that in addition to the single day kind of conversions that there's a decline in the totally new to Vail customers. Maybe if that's correct, maybe just a little bit of color on maybe why is that the industry normalization? Then residual weather, what is that?

Question: Ben Chaiken - MIzuho Group - Analyst : Got it. Thanks.