BROOMFIELD, Colo.—Vail Resorts Inc. said today that its fiscal second-quarter earnings rose 18 percent as the ski-resort operator benefited from the timing and mix of some real estate sales and the full operations of a new resort.
Vail Resorts’ key mountain segment revenue dropped, however, as fewer out-of-state guests visited the resort, and the company predicted weaker trends for the rest of fiscal 2009.
Also today, the company announced it will implement a companywide wage reduction plan in an effort preserve more jobs while saving more than $10 million annually.
For the quarter ended Jan. 31, earnings climbed to $60.5 million, or $1.65 per share, from $51.3 million, or $1.31 per share, a year ago.
Revenue gained 8 percent to $388.8 million, from $360 million in the second quarter of fiscal 2008.
Analysts surveyed by Thomson Reuters forecast earnings of $1.28 on revenue of $365.1 million.
Overall, mountain segment revenue fell 8 percent to $258.5 million during the quarter as lift ticket revenue dropped 5 percent despite a surge in season pass sales.
Chief Executive Rob Katz noted that guests are also spending less on average during their vacations, especially on private ski school lessons, fine dining and retail.
As of Jan. 31, Vail Resorts’ lodging bookings were down 15 percent compared with the prior year, as guests continued to book their trips much closer to the date of travel.
Vail Resorts also provided an update on ski season metrics through March 1. The company said total skier visits for the company’s five mountain resorts were down 5 percent for the season. Lift ticket revenue, which includes some season pass revenue, was down 8 percent.
As of Feb. 28, booked room nights at the company’s owned and managed properties were down 14 percent from the prior-year period.
Katz noted that the season-to-date metrics are consistent with those seen earlier in the season, despite the worsening economic environment. He noted that year-over-year booking trends have improved from a drop of 23.3 percent announced in early December.
The CEO predicted, however, that trends will worsen for the remainder of the fiscal year.
“This is due primarily to the third quarter being a historically larger revenue quarter than the second quarter with the continuing negative trends having a greater impact,” Katz said.
He also noted that the company does not expect to benefit from real estate closings or one-time gains, as it did in the first half of the year.
Katz said, however, that the company’s solid capital structure and balance sheet will allow the company weather even a prolonged downturn.
