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Will Winter Hopes Send Vail Resorts Higher?

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Vail Resorts (NYSE: MTN  ) will release its quarterly report on Friday, and one thing is certain: the company's results are going to look ugly. But even though the summer is the low season for Vail Resorts earnings, it and other winter-oriented companies like snowmobile makers Polaris Industries (NYSE: PII  ) and Arctic Cat (NASDAQ: ACAT  ) have seen their stocks hit all-time record high levels as investors have high hopes for the coming winter months.

Vail Resorts operates ski and mountain resorts, primarily focusing on Colorado and the Lake Tahoe area. Although the company has made efforts to bring in revenue year-round, the high ski season is still its most profitable time of year, and so the late-spring and early summer quarter is typically a time for the company to retrench and plan its strategy for the coming year. Will winter finally deliver the strong results that could push Vail higher still? Let's take an early look at what's been happening with Vail Resorts over the past quarter and what we're likely to see in its report.

Stats on Vail Resorts

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$117.82 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Can Vail Resorts head up the slopes this quarter?
In recent months, analysts have gotten a little less optimistic about Vail Resorts earnings, widening their estimates for July quarter losses by $0.03 per share and cutting a nickel per share from their full-year fiscal 2014 projections. The stock, though, has moved higher by 13% since late June.

Vail came into the quarter on a downbeat note, as its April-quarter earnings missed expectations. Net income jumped 23% on an 11.5% rise in revenue, and the company reported strong results for its Colorado resorts. But warm and dry conditions in the Lake Tahoe area held back the quarter's overall gains, and as a result, the company failed to live up to companywide sales and earnings expectations.

But interest in winter-sports activities has continued to remain strong. Arctic Cat has climbed even in the face of challenging weather conditions, as investors look for the company to seek international growth opportunities that could help it become more of a global force in the industry. Opportunities in Canada and northern Europe especially could help Arctic Cat, especially if the European recession eases up. Meanwhile, Polaris has seen success not just in snowmobiles but in its all-season ATV and motorcycle sales as well and has plenty of global growth potential as well.

Indeed, Vail Resorts is also looking to the international realm for business-boosting strategies. Last month, it announced that holders of its Epic Pass will be able to get five days of skiing at France's Les 3 Vallees. That adds to the offerings in Austria and Switzerland that buyers of the $689 pass had access to, in addition to U.S. resorts in Colorado, Utah, Tahoe, and the Minneapolis and Detroit areas. With other pass options offering access to New Zealand's Mount Ruapehu, Vail Resorts hopes that global alliances will help it going forward.

In the Vail Resorts earnings report, watch to see what plans the company has for future growth and expansion. If it can build new partnerships and widen its scope, then Vail Resorts could benefit greatly from the popularity of winter sports generally.

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Related Tickers

9/23/2016 4:02 PM
MTN $160.56 Down -1.40 -0.86%
Vail Resorts CAPS Rating: ****
ACAT $14.96 Up +0.23 +1.56%
Arctic Cat CAPS Rating: **
PII $74.89 Up +1.08 +1.46%
Polaris Industries CAPS Rating: *****