Vail Resorts (NYSE:MTN), the Broomfield, Colorado-based ski-resort company, has projected a rise in profits for the next fiscal year, as margins at its resorts are expected to improve. This growth forecast for fiscal 2024 comes despite the company recording a wider-than-expected loss in its fiscal fourth quarter.
In the fiscal fourth quarter, Vail Resorts reported a net loss of $128.6 million, or -$3.35 per share. This figure represents an increase from the $108.7 million, or -$2.70 per share, loss reported during the same period last year. This result missed analysts' expectations, who had predicted an average loss of -$3.24 per share according to data compiled by Thomson Reuters (NYSE:TRI).
Despite this setback, the company's revenue for the quarter saw a slight increase of 1.0%, rising to $269.8 million from $267.1 million last year. According to InvestingPro data, the company's revenue growth for the last twelve months prior to the third quarter of 2023 was 17.2%, and the quarterly revenue growth for the fiscal year of 2023's third quarter was 5.25%.
However, the company also expects to post a loss of between $168 million and $191 million in the fiscal first quarter of 2024 due to weaker weather trends in Australia and a decline in mountain destination travel in North America.
Looking ahead to fiscal 2024, Vail Resorts is forecasting a profit between $316 million and $394 million. This guidance is based on the assumption that the current economic environment will persist and normal weather conditions will continue throughout ski seasons across its resorts. Analysts polled by FactSet expect a full-year profit of $361.6 million.
The company's optimistic outlook for fiscal 2024 reflects its expectation of improved margins at its resorts relative to 2023. According to InvestingPro data, the company's gross profit margin for the last twelve months prior to the third quarter of 2023 was 44.95%, and the operating income margin was 20.63%.
However, this projection is contingent upon prevailing economic conditions and normal weather patterns across its various locations. The company's performance is also influenced by other factors, such as its management strategies and financial health. According to InvestingPro Tips, the company has a high earnings quality, with free cash flow exceeding net income, and its management has been aggressively buying back shares. The company also yields a high return on invested capital and has maintained dividend payments for 13 consecutive years.
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