Arpine Kocharian

Arpine Kocharian asked for clarification on the 2026 unit growth outlook, specifically how the 20% decline in net units reconciles with previous expectations of mid-single-digit attrition and 10% gross additions, considering brand divestitures. She also inquired about the same-store growth embedded in the current year's guidance and the Q4 and 2026 outlook for Club Pilates' same-store growth.

Answer

CEO Mike Nuzzo explained that 2025 saw 341 gross openings and 140 closures, concentrated in Pure Barre, StretchLab, and YogaSix, with 92 domestic and 48 international closures. He stated the 2026 guidance is a conservative approach, likely overestimating closures, and expects performance to largely mimic 2025 with similar closure distributions. Mike Nuzzo also noted that the guidance reflects the organic growth trends from late 2025, acknowledging top-of-funnel issues and marketing missteps. CFO John Meloun confirmed Club Pilates had a +3% full-year same-store sale but a -3% in Q4, attributing the Q4 decline to tough year-over-year comparisons and promotions, emphasizing that with high AUVs, consistent positive comps are challenging without price increases.

Arpine Kocharian asked for clarification on the 2026 unit growth outlook, specifically bridging the previous mid-single-digit attrition and 10% gross additions with the current 20% decline in net units. She also asked about the same-store growth embedded in the 2026 guidance and the Q4 and expected 2026 same-store growth for Club Pilates.

Answer

CFO John Meloun explained that the 2025 gross openings were 341, with 140 closures concentrated in StretchLab, Pure Barre, and YogaSix. He noted that domestic closures were low (3.5%), while international were higher (10%). The 2026 net unit guidance (150-170) is a conservative approach, expecting similar performance to 2025. CEO Mike Nuzzo added that the guidance reflects 2025 organic growth trends, acknowledging a need for improvement. John Meloun specified that Club Pilates had +3% same-store sales for the full year 2025 but was down 3% in Q4 due to tough year-over-year comparisons and high AUVs, making consistent positive comps challenging without more unit openings.

Arpine Kocharian asked about the aggregate EBITDA impact of United Parks & Resorts' cost improvements for 2026 and the incremental portion of the $50 million cost savings. She also sought more details on early demand indicators, specifically 2026 pass product volume and price, and the change in Discovery Cove booking momentum.

Answer

CEO Marc Swanson emphasized the company's focus on cost discipline and initiatives for 2026, without providing specific numbers for EBITDA impact. Interim CFO Jim Forrester added that plans aim to anticipate headwinds and reduce costs on a net basis. Regarding demand indicators, Mr. Swanson highlighted promising Discovery Cove reservations and group bookings, along with VIP tour bookings and in-park products. He noted it's early for pass sales, with the peak season ahead, and expressed satisfaction with Discovery Cove's high single-digit booking growth following a record 2025 attendance.

Arpine Kocharian inquired about the expected aggregate EBITDA contribution from cost improvements in 2026 and the incremental portion of the $50 million cost savings. She also asked for more details on 2026 pass product momentum (volume and price) and other early demand indicators, specifically noting a change in Discovery Cove booking growth from over 20% to high single digits.

Answer

CEO Marc Swanson emphasized the company's heightened focus on cost discipline and initiatives for 2026, declining to provide specific EBITDA numbers. Interim CFO and Treasurer Jim Forrester added that the plan is to reduce costs on a net basis by anticipating headwinds. Mr. Swanson highlighted promising early indicators from Discovery Cove reservations and group bookings, noting that the key period for pass sales is still ahead, driven by new attractions and an expanded concert lineup. He expressed satisfaction with Discovery Cove's high single-digit growth, building on a record attendance year in 2025.

Arpine Kocharian requested an updated view on the full-year EBITDA outlook, referencing a prior benchmark of over $700 million that was no longer mentioned. She also asked if guests who are visiting are spending less, particularly on in-park purchases.

Answer

CEO Marc Swanson did not provide a specific EBITDA number but reiterated the key factors for a strong second half: positive quarter-to-date attendance, strong forward bookings for events, favorable weather comparisons, and a new cost-savings plan. Regarding spending, he noted that in-park per capita was only slightly down in Q2, attributing it to weather-related promotions, and expressed optimism about driving growth during the upcoming Halloween and Christmas seasons.

Arpine Kocharian requested more detail on the unit economics of new clubs, considering their larger square footage and expanded amenities. She also asked about expected changes to typical seasonality for member growth in the back half of 2026 and the current delta between rack rates and what's running through the system.

Answer

Bahram Akradi, Founder, Chairman, and CEO, explained that new clubs operate with higher membership prices and fewer members (3,700-4,000 vs. 4,500-4,600 for existing clubs), leading to higher utilization and efficiency. Erik Weaver, EVP and CFO, confirmed no changes in seasonality expectations. Regarding rack rates, Bahram Akradi and Erik Weaver stated the delta between rack rates and average member dues is approximately $19.5 million per month, driven by strategic, club-by-club price increases to optimize customer experience and manage saturation.

Arpine Kocharian asked for details on the unit economics of new clubs, considering their larger square footage and expanded amenities, and if any changes to typical seasonality or member mix are expected. She also requested a refresher on the current rack rates versus what's running through the system and the delta between them.

Answer

Bahram Akradi, Founder, Chairman, and CEO, explained that new clubs operate with higher membership prices, no discounted programs, and a lower number of highly engaged members, making the model more efficient. Erik Weaver, Executive Vice President and CFO, quantified that new clubs are planned for 3,700-4,000 memberships compared to 4,500-4,600 for existing clubs, with no changes to seasonality expected. Bahram Akradi noted the delta between rack rates and average dues remains around $17 million-$20 million per month, as rack rates are raised to protect customer experience while legacy prices are also adjusted.

Arpine Kocharian of UBS sought clarification on the bridge between Callaway Golf's 2025 and 2026 revenue and EBITDA guidance, specifically inquiring about the impact of $40 million in incremental tariffs, the extent of pricing increases (suggesting 8-10% in core products), and how these factors offset each other.

Answer

President and CEO Chip Brewer clarified that pricing increases were "select" and not as high as 8-10% across the core product line. EVP, CFO, and CLO Brian Lynch detailed that the $40 million decrease in EBITDA at the midpoint is primarily due to $40 million in incremental tariffs and $16 million less in dividend income from a lower cash balance after debt repayment, noting that EBITDA would have been up without these two factors. For the follow-up on new products, Mr. Brewer expressed excitement about the new Tri-Force driver technology, which launches tomorrow, but noted it's premature for definitive feedback.

Arpine Kocharian inquired about broader visitation trends in November and early December, the traction of promotional initiatives, and any observed bifurcation in consumer spending between upper-end and lower-end segments at regional versus destination resorts.

Answer

Rob Katz, CEO of Vail Resorts, stated that it is too early in the season to fully assess visitation trends or the impact of new initiatives, especially given the influence of early season conditions. He indicated that the company is not yet ready to suggest that results are being impacted by broader consumer bifurcation, attributing current observations more to internal trends than macro factors.

Arpine Kocharian asked for more color on where Vail Resorts is observing the most weakness and resilience within its consumer base, including any distinctions between destination and regional resorts. She also inquired about specific pass purchase trends, such as the lower continuation rate among less tenured pass holders. Additionally, she asked what factors would need to materialize for the company to achieve the upper end of its fiscal year 2026 guidance range.

Answer

CEO Rob Katz noted that results are broadly consistent across various guest demographics, geographies, and pass types, with the exception of lower renewal rates for pass holders with one year or less tenure. He suggested this broad-based performance might indicate market maturation or issues with their marketing approach. CFO Angela Korch added that there's no change in net migration behavior (trade-up vs. trade-down) among renewing pass holders. Regarding the fiscal year 2026 guidance range, Ms. Korch stated that visitation is the primary driver for hitting the upper end, as it significantly impacts ancillary revenues. Mr. Katz added that outperforming on either pass or lift ticket visitation, or initiatives working better/earlier than expected, could lead to the upper end of the range.

Arpine Kocharian asked for more color on where the company is seeing the most weakness and resilience in its consumer base, highlighting any differences between destination versus regional resorts or trends among less tenured passholders. She also inquired about what factors would need to occur for the company to hit the upper end of its fiscal 2026 EBITDA guidance range, specifically if more nimble pricing and targeted window traffic strategies could impact lift volume this season.

Answer

CEO Rob Katz indicated that the observed results are fairly consistent across different guest demographics, geographies, and pass types (new/renew), with a lower renewal rate for one-year or less pass holders being a known trend. He suggested the broad-based performance points to either market maturation or an opportunity for improved marketing engagement. CFO Angela Korch stated that visitation is the biggest driver for hitting the upper end of the guidance range, as it impacts ancillary revenue significantly. Rob Katz added that outperforming on pass or lift ticket visitation, potentially due to strategies working earlier than expected, could lead to the upper end of the range.

Arpine Kocharian from UBS asked for more color on where Vail Resorts is observing consumer weakness versus resilience, any notable differences in pass sales trends between destination and regional resorts, and further insights from pass purchase trends, particularly concerning less tenured pass holders. She also followed up by asking what specific factors, such as nimble pricing in off-peak periods or targeted window traffic, would need to materialize for the company to achieve the upper end of its EBITDA guidance range.

Answer

CEO Rob Katz noted that current results show broad-based performance across various guest demographics, geographies, and pass types, with lower renewal rates for one-year or less pass holders being a consistent trend. He suggested this broad impact indicates either market maturation after rapid growth or a need to improve marketing engagement. CFO Angela Korch added that there's no change in net migration behavior among renewing pass holders (trade-up vs. trade-down). Regarding the upper end of EBITDA guidance, Korch stated that visitation is the biggest driver, as it impacts all ancillary revenues at a high rate. Katz added that outperforming on either pass or lift ticket visitation, or strategies working earlier than expected, could lead to the upper end of the range.

Arpine Kocharian from UBS Group questioned if the North American strategy of raising lift ticket prices to drive pass sales would work in Europe. She also asked about confidence in maintaining spring pass sales trends given the macroeconomic environment.

Answer

CEO & Chair Rob Katz stated that a different playbook would be required for Europe due to its unique market dynamics, but he sees a long-term opportunity for an advanced commitment model. On the sales outlook, Katz said that assuming a stable macro environment, the company feels good about maintaining the trends seen in the spring.

Arpine Kocharian asked for details on the key assumptions behind the full-year revenue guidance and inquired about the cadence and sources of the announced $100 million in cost savings.

Answer

CFO Liz Coddington explained that the projected revenue inflection after Q1 relies on upcoming product innovations, price adjustments, and changes to fees for delivery and returns. She stated that about half of the $100 million in run-rate cost savings has been actioned through workforce reductions, with the remainder to be achieved via indirect spend optimization and potential workforce relocations. The savings are primarily from G&A, with R&D, sales & marketing, and COGS also contributing, and about 15% of the total is from reduced stock-based compensation.

Arpine Kocharian of UBS Group inquired about the plan to accelerate asset divestitures, seeking details on the potential size and timing beyond the two already announced land sales. She also requested clarification on the $90 million back-half cost savings to understand the true synergy upside versus the $25 million cost pull-forward.

Answer

CEO Richard Zimmerman and CFO Brian Witherow confirmed they are strategically reviewing the entire portfolio with the board, with an immediate focus on executing the two announced non-core asset sales to narrow management focus and reduce risk. Witherow clarified that the second-half cost savings plan, of which about two-thirds is permanent, keeps them on track to achieve their original $120 million annualized merger synergy target by the end of 2025.

Arpine Kocharian of UBS Group sought to confirm the key puts and takes in the reinstated guidance and asked for visibility on shipment cadence to see if Q2 disruptions could be recovered.

Answer

CFO Paul Ruh confirmed the assessment of cost savings versus tariffs was broadly correct but highlighted that top-line uncertainty might require incremental promotional spending. Regarding shipments, Ruh explained that a shift from direct import to domestic shipping caused a timing delay, but he expects the majority of those sales to be captured in the second half of the year.