Arpine Kocharian

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 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 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 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 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 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.