Vail Resorts, Inc. Q2 FY2026 earnings call

• Challenging weather in Rockies impacted visitation and performance, with snowfall and temperature issues. Advanced commitment strategy provides stability with past holders making up ~75% of annual visitation. Geographic diversification of portfolio to mitigate regional weather impacts.
• Launched past sales for 2026-2027 season with new products, including 20% discount for skiers and riders ages 13-30, and enhanced marketing campaign 'Epic Passions'.
• Announced 3%-4% price increases for Epic and Epic Local passes, and targeted updates to pass pricing. Positive reception to Epic Friends and advanced lift tickets, with Epic Friend ticket redemption rates up and one-month advance lift tickets showing early positive signs.
• Achieved record high system-wide guest satisfaction scores this season, reflecting team members' exceptional execution.

The Rockies are the largest driver of resort EBITDA. Q2 total net revenue declined ~5% due to unfavorable weather in Rockies. Lift revenue declined ~3% despite 13% visitation drop, with past sales up ~3% heading into the season. Season-to-date, skier visitation declined ~12%, lift revenue declined ~4% with pass revenue growth offset by non-pass lift ticket revenue decline. Ancillary revenue trends improved but remain down vs prior year. Fiscal 2026 net income expected in range 144M - 190M, resort reported EBITDA in range 745M - 775M. Resource efficiency transformation plan expected to exceed initial $100M annualized savings target by ~$6M by end of fiscal 2026.

• Reduced fiscal 2026 net income guidance to range 144M - 190M and resort reported EBITDA guidance to range 745M - 775M due to persistent challenging weather conditions in Rockies.
• Expect cash taxes for the year to be approximately 95-105M.
• Resource efficiency transformation plan expected to exceed initial $100M annualized savings target by ~$6M by end of fiscal 2026.
• Reaffirmed calendar year 2026 capital plan with core capital expenditures 215-220M and total capital spending 234M - 239M, maintaining quarterly dividend at $2.22 per share and being opportunistic on buybacks.

• Unprecedented weather conditions in Rockies which significantly impacted visitation and performance. Greater variability in guidance due to ongoing challenging weather conditions in the season.

Q: Sean Kelly from Bank of America asked about how the conversation with consumer audience is evolving in a season like this and impact on renewals and next year in local communities hit hard by weather.

A: Rob said people tend to see this year's weather as an aberration, not indicating long-term disengagement with skiing, and passes are priced to be planable year after year.

Q: David Katz with Jefferies asked about marketing efforts, particularly social presence.

A: Rob said social first content and influencer content have been well-performing, and they feel good about media spend and channel shifts made this year.

Q: Patrick Scholes with Truist asked if snowmaking investments are being contemplated after weak snowfall.

A: Rob said they have a long-term commitment to upgrading snowmaking and will prioritize such opportunities as they make sense.

Q: Matthew Boss with JP Morgan asked about traction of proactive actions to accelerate visitation.

A: Rob said actions like driving past sales, Epic Friends ticket performing well, one-month advance discount showing positive signs, and off-peak ticket prices making a difference are green shoots.

Q: Jeff Stanchel with Stiefel asked about impact of bad weather on pass sales funnel.

A: Rob said bad weather can have an impact, but they see moves like broader marketing, increased investment, etc., as tailwinds.

Q: Arpine Cocharian with UBS asked about past product pricing and consumer segmentation.

A: Rob said they are segmenting the customer base, providing discount to price-sensitive young adults, and charging tax on all products which consumers understand.

Q: Arpine Cocharian with UBS also asked about variability in guidance.

A: Angela said it's all weather-driven, with snowpack and temperature variability creating uncertainty in the rest of the season.

Q: Ben Chaikin with Mizuho asked about past benefits and product thinking in worst Rocky Mountain season.

A: Rob said they are always looking at past benefits and may add things for next season, but winter-focused is still primary.

Q: Laurent Vasilescu with BNP Paribas asked about decision behind 20% discount for Gen Z and past pricing vs lift ticket pricing.

A: Rob said they use data on guest behavior and price elasticities to optimize revenue, and there's a gap in past pricing for this cohort.

Q: Brant Montour with Barclays asked about elasticity and sensitivity of model to young adult program.

A: Rob said they think the young adult program is accretive, not a zero-sum game, and visitation is incremental.

Q: Chris Waronka with Deutsche Bank asked about cannibalization of Gen Z pricing and concern about losing customers to cruise industry.

A: Rob said they analyze cannibalization, and while cruise industry is strong, they don't see it as taking from them but need to stay competitive.

Q: Stephen Grambling with Morgan Stanley asked about customer experience initiatives ahead of next season.

A: Rob said they are excited about team member talent and engagement, and technology initiatives like the content management system and app personalization.