Vail Resorts stock falls after earnings

Vail Resorts (MTN -3.91%) announced fiscal Q4 2024 results after the market closed yesterday and investors were unimpressed by the news. Revenue fell 1.6 percent to $265.4 million and net loss widened from $128.6 million to $175.4 million, or $4.67 per share.

As a result, shares ended the day down nearly 4%.

Revenue slightly beat estimates, but analysts had expected a loss of just $4.26 per share. To make matters worse, the company announced a major restructuring to cut costs.

A downward trend for Vail Resorts

The fiscal fourth quarter is a slow time for Vail Resorts without the winter ski season, but investors can take a few keys from what’s being reported. The first was Epic Pass sales, which were down 3% in units and dollar sales were up 3% for the upcoming 2024/25 ski season.

What this tells us is that Vail Resorts is raising prices and customers are choosing not to buy a pass. There’s a limit to how much the company can charge for passes, and if you’ve looked at the price of lift tickets lately, you can probably see why consumers balk at the current asking price.

Layoffs are coming

As part of a plan to improve profits, management announced a “two-year transformation plan” that will call for annual spending cuts of about $100 million by the end of fiscal 2026, including cutting 14 percent of the workforce. corporate work and about 1% of operations. personal.

While growth has been the name of the game for Vail Resorts for the past decade, now it’s all about efficiency. And the company needs to become more efficient quickly, because customers aren’t willing to pay more to access the slopes.