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Vail Resorts dials back earnings expectations

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Will the early season snow drought affect Vail’s bottom line? Only time will tell. Bob Berwyn photo.

Colorado’s second consecutive early season snow drought may be affecting pass sales and advance bookings

By Summit Voice

FRISCO — Vail Resorts stock swooned a bit, but then started to recover, after   CEO and chairman Rob Katz, said this week that it may be a challenge for his company to achieve its previously stated earnings goals.

MTN dropped as much as 12 percent and ended the day down 8 percent, at about $52 per share, after Katz said that early season booking trends are not as strong as they could be. The stock price started to recover Wednesday, climbing back up about 2.5 percent, perhaps with investors, just like skiers, taking a wait and see attitude.

That was Katz’s line, too, as he told investors that the holiday season will likely tell the tale.

“We will know more about the season after the holidays and intend to address our fiscal 2013 guidance when we release our ski season metrics in mid-January,” Katz said in the earning statements released to investors early Tuesday morning.

For the first quarter of fiscal year 2013, the company reported a net loss of $60.6 million compared to a net loss of $55.7 million in the same period in the prior year, a decline of 8.7 percent.

Season passes helped drive revenue in the quarter, with sales to-date (including 4-Packs) up about 5 percent in units and approximately 8 percent in revenue compared to the same period in the prior year, and adjusted as if Kirkwood were owned in both periods.

But lack of early season snowfall in Colorado may be affecting overall sales. Katz said current weather conditions are a concern for skiers who have delayed their pass-purchasing decisions.

“The total growth of the (pass) program is slightly below our expectations, as we believe that the amount of sales that we pulled forward to earlier selling periods was somewhat larger than expected,” he said. “Sales in Tahoe and international markets continued to show the most strength. We expect the final results of the program will be generally consistent with these percentage increases as final sales conclude in the coming weeks,” he added.

Overall,  lodging reservations are slightly down from last year, but a kids-ski-free with lodging program at Keystone has helped drive strong early bookings at that Summit County resort. Based on historical averages, less than half the winter season reservations are on the books this time of year.

With the ski season just ramping up, Katz said the earnings figures from the first fiscal quarter generally reflect late summer activity at the company’s properties, and that there were “positive trends” in summer mountain and lodging operations, with improved visitation driving increased revenue from summer activities and dining.

The company sold four luxury condos at the Ritz-Carlton Residences in Vail and reported a positive net real estate cash flow of $5.5 million for the quarter.

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