MTN

Long-Term Strategic Priorities & Weather Impact

• Robert A. Katz returned to the CEO role one year prior, with unchanged priorities to deepen guest engagement/loyalty and drive stronger revenue growth by leveraging the company's owned-and-operated resort network, advanced pass commitment model, and deep guest relationships.
• The 2025-2026 ski season saw unprecedented adverse weather, with Rockies region snowfall down 30% from the previous 2012 record low, driving an industry-wide 24% decline in Rockies visitation (vs. the prior pre-COVID worst decline of 8% in 2012).
• Despite the weather-driven revenue decline, the company maintained its focus on high-quality guest experience, achieving record guest experience scores with year-over-year increases at every Rockies resort, full staffing for the third consecutive season, high seasonal employee return rates, falling employee injury rates, and strong workforce planning efficiency.

Key Strategic Initiative Updates

• Evolved marketing approach: Shifted to increased targeted paid media with adjusted channel strategies, improving pass sales trends by 5 percentage points in the post-Labor Day selling period and increasing unaided brand awareness among destination guests for top resorts.
• Lift ticket optimization: Expanded Epic Friend discounted pass holder benefit tickets, driving a 10% increase in benefit ticket visitation despite a 10% overall decline in lift ticket visitation. Introduced 30% discounted super-advanced lift tickets for purchases made 28+ days in advance, driving a 65% increase in pre-purchased tickets with no material cannibalization of other products. These moves drove significant industry outperformance: Vail's US lift ticket visitation declined 12% vs. an industry 20% decline, with 8% growth in the Northeast vs. an industry 8% decline.
• Next season spring pass sales: Total pass units declined 10% and sales dollars (including tax) declined 5%, with an 8% decline in total pass days sold reflecting a higher mix of higher-value unlimited products. Declines were concentrated in weather-impacted Rockies destination markets, while Eastern US and Whistler Blackcomb saw only low single-digit unit declines. The new young adult pass product outperformed all other age cohorts, and unlimited pass products outperformed lower-frequency products. Renewal pass holder performance was much stronger than new pass sales, and third-party data indicates Vail's spring pass performance meaningfully outperformed the broader industry. Management attributes much of the decline to delayed purchase decisions rather than reduced overall intent to ski next season, consistent with historical patterns where visitation fully recovers after a poor weather season if the following season has normal conditions.

Operational & Balance Sheet Highlights

• The company remains on track to exceed its original 2-year Resource Efficiency Transformation Plan target of $100 million in annualized efficiencies, expecting to reach $106 million by the end of fiscal 26, with an additional $30 million in savings targeted for fiscal 28.
• The balance sheet remains strong, with $1.1 billion in liquidity and a net leverage ratio of 3.5x trailing 12 months EBITDA. Capital allocation priorities are unchanged: reinvest in the business, maintain balance sheet flexibility for acquisitions, and return capital to shareholders. The quarterly dividend is maintained at $2.22 per share, with approximately $45 million in share repurchases completed year-to-date.

• Full year fiscal 26 resort EBITDA guidance is updated to a range of $735 million to $755 million, with the new midpoint at the bottom of the prior range provided in March, consistent with the April update.
• Full year net income attributable to Vail Resorts is guided to a range of $128 million to $162 million, and cash taxes are guided to a range of $75 million to $85 million.
• Total core capital spending is expected to come in between $215 million and $220 million, with total capital investments between $234 million and $239 million, consistent with prior capital plans.
• Management is planning for a normal 2026-2027 ski season with normal weather conditions, with no changes to long-term staffing, capital investment, or operational planning based on current spring pass sales trends. Early indications for the 2026 Australian summer season are positive, with EPIC Australia Pass units up 26% and sales dollars up 31%.

Vail Resorts reports a single resort operating segment for this quarter. Overall resort revenue declined 7% year-over-year, with lift revenue declining 5% even as total visitation fell 15%, partially supported by a 3% increase in North American pass sales heading into the season. Resort EBITDA declined 9% year-over-year, with cost discipline, geographic portfolio diversity, and the company's advanced commitment model mitigating larger headwinds from poor weather. Most committed pass visitation in North America declined 17% for the winter, while lift ticket visitation declined 10%. The impact was concentrated in the Rockies region, where total seasonal snowfall finished 55% below the 30-year average.

• Unprecedented poor weather during the 2025-2026 season created uncertainty around consumer purchasing behavior for next season, as delayed pass purchases may not convert to full recovery in fall sales or in-season lift ticket demand.
• Macroeconomic uncertainty, including higher fuel and air travel costs, could impact destination visitation, though management notes this impact is currently difficult to disentangle from residual weather impact.
• The company faces potential competitive risk, as underperforming peer ski resort networks could respond with more aggressive pricing or promotions to regain share, particularly in the young adult consumer segment.

Q: Can you provide more context on how well the new young adult pass product is performing, and how cohort performance varies across the portfolio? / A: Management declined to provide specific near-term data, noting it will release full details after the complete selling season. They confirmed the product is meaningfully outperforming all other age cohorts, and is driving positive trade-up to the core Epic pass product, though it will only partially offset broader pass declines this season. The largest pass unit declines are concentrated in weather-impacted Rockies destination markets (Colorado, Utah, Tahoe), while the Northeast and Whistler Blackcomb see only modest declines, confirming the weakness is primarily weather-driven rather than structural. Renewal pass holders are outperforming new pass buyers, and unlimited high-value products are outperforming lower-frequency products, which are more popular with newer, more price-sensitive buyers.

Q: Have current pass sales trends changed your operating planning for next season, and can you elaborate on planned guest experience improvement initiatives? / A: Management noted historical data shows full visitation recovery after a poor weather season when the following season has normal conditions, with pent-up demand often driving visitation above pre-downturn levels. They see current softness as just delayed purchasing timing, so there is no change to planning for a normal season. The planned step-change in guest experience will come from leveraging the company's fully integrated resort network to roll out system-wide technology and process improvements, including digitization of ski school, upgraded in-resort dining experiences, and expanded features in the company's mobile app to reduce friction for guests across all on-mountain interactions, such as the new My Epic Gear customized rental program.

Q: If delayed pass purchasing continues, is there potential for enough lift ticket growth to offset soft pass sales, and what cost levers are available to protect EBITDA next season? / A: Management notes there is a fluid dynamic between pass and lift ticket demand, so lower pass sales naturally open opportunity for strong lift ticket growth. New discounted lift ticket products (Epic Friend tickets, super-advanced purchase tickets) performed very well in their first year, with low market awareness leaving significant room for growth next season. For EBITDA protection, the full annualized benefit of the $106 million Resource Efficiency Transformation Plan will flow into next fiscal year, with additional new efficiency initiatives starting in fiscal 27. The company's unified workforce planning approach also allows it to nimbly adjust variable labor costs if visitation comes in lower than planned, while it will maintain full staffing to support guest experience for a planned normal season.

Q: Why did you add the new 'days sold' KPI for pass sales, and what should investors know about tracking it? / A: Management had tracked days sold internally for a long time, as the prior unit sold metric treats all passes equally regardless of how many skiing days they include: a 1-day Epic pass counts as one unit the same as an unlimited season pass. Days sold provides more visibility into the actual volume of skiing visits the company has sold, which aligns more closely with expected revenue and on-mountain volume. The company will continue to report both metrics, as unit sales still provide valuable insight into overall guest count growth.