Shares of Vail Resorts (MTN -1.00%) climbed more than 12% at the open and traded up 6% midday on Friday after the ski resort operator posted a quarterly profit that came in ahead of expectations and provided a positive outlook for the 2019-2020 season.
Vail Resorts is one company that doesn't complain about a harsh winter. After markets closed Thursday, the resort operator reported fiscal third-quarter earnings of $7.12 per share, beating the $7.06 per share consensus, on revenue of $958 million that was within range of expectations.
Vail benefited from a snowy winter that drove business to its ski resorts. Lodging revenue was up 17%, and lift revenue was up more than 16%, benefiting from stronger pass sales coming into the season and strong attendance from walk-up visitors without passes. Vail also grew retail and equipment rental sales by 10%, and recorded a 9% gain in ski school revenue.
Company Chairman and CEO Robert A. Katz said on a post-earnings call with investors that while there was weakness in international visitation, particularly at Vail's British Columbia properties, the company's broad portfolio is paying dividends.
Our results throughout the 2018-2019 North American ski season highlight the growth and stability, resulting from our season pass, the benefit of our geographic diversification, the investments we make in our resorts, and the success of our sophisticated data-driven marketing efforts. Our Colorado, Utah, and Tahoe resorts experienced strong local and destination visitation throughout the third fiscal quarter, supported by favorable conditions across the Western U.S., which also allowed for an extension of the ski season for select resorts in Colorado and Tahoe.
Vail reported early progress in selling passes for the 2019-2020 ski season. Through the end of May, the company had seen a 9% rise in units sold, thanks in part to its efforts to expand its network in the Northeastern U.S. A new alliance with the Sun Valley resort in Idaho and Japan's Hakuba Valley should also help contribute to sales growth.
Vail was a longtime strong performer that had been skiing downhill in recent quarters, in part because of a couple of years with weak early season snowfall. The snow came back this past winter, and with it the crowds. It's now up to management to keep the momentum going.