Vail Resorts, Inc. (NYSE:MTN) Q3 2023 Earnings Call Transcript

Unidentified Analyst: Hey, guys. It’s [Zion] [ph] on for Laurent. Thanks for taking the question. Also want to echo the nice start on the pass unit sales and dollars. I’m just wondering though you mentioned that pass sale growth could moderate versus the spring to the fall as consumers, you’re pushing them to purchase earlier. But I think you mentioned that last year as well. So, I guess, has anything changed versus last year or are you starting to see the mix accelerate to more pre-Memorial Day or is there anything to, kind of think about there?

Kirsten Lynch: I don’t think there is a change in dynamic necessarily year-over-year. I would say, it’s something we’re always focused on is, you know, ideally, we would like to get our guests to commit as early in the sales cycle as possible, and we’re always driving for that. And I’d say, given that focus and intention that we have, it is – it has been typical for our growth rates to moderate throughout the sales cycle. We are still expecting strong sales growth on a full-year, but expect that it may moderate from where it is right now because of that dynamic.

Unidentified Analyst: Okay, got it. And then maybe as a follow-up, maybe you can remind us a bit about the durability of revenues in the event of the downturn. Think things like ancillary might be a little more exposed, but maybe a reminder of how they’ve performed in previous downturns or how you about things like ancillary? Thanks.

Kirsten Lynch: Yes. In previous downturns, we’ve seen strong resilience in our visitation and our lift revenue because of our strategy to get our guests to commit in advance. We have seen some impact historically in downturns on ancillary spend, but actually the commitment in advance has given us a lot of stability through those downturns.

Unidentified Analyst: Okay, very helpful. Thanks guys and good luck.

Kirsten Lynch: Thank you, Ian.

Operator: We’ll take our next question from David Katz of Jefferies. Your line is open.

David Katz: Hi. Good afternoon, everyone. Thanks for taking my questions. I wanted to just follow on the question regarding capital returns. And how you’ve thought about the balance between a hearty dividend and hearty repurchase. And obviously, the circumstances dictate those, but I’d love just a little more color on your philosophy between too.

Angela Korch: Thanks, David. As Kirsten mentioned, dividend continues to be our primary method and we also increased the dividend last quarter. And so, that will continue to be kind of a recurring way that we return kind of excess cash to shareholders. Yes, I think this quarter we repurchased the 400 million, really we had raised a lot of capital during COVID and so we did have some excess cash on the balance sheet. And so, we said we were going to be a little more aggressive in returning that back to shareholders. And so, we took the opportunity during the quarter to return it. Yes, what we think was an attractive valuation.

David Katz: Okay. And just as my follow-up, with respect to the new technology that you discussed at Investor Day and discussed a bit more today, is the revenue and profitability opportunity around pre-ordering gear intended to drive people toward the pass or is the pass intended to drive people toward the gear? And is the gear more or less profitable in the new model, then it’s been the old fashioned way if you’ll allow.