Vail Resorts (MTN) Q3 2026 Earnings Transcript

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DATE

June 8, 2026

CALL PARTICIPANTS

• Chief Executive Officer — Robert A. Katz
• Chief Financial Officer — Angela Korch
• Vice President, Investor Relations — Connie Wang

TAKEAWAYS

• Resort Revenue -- Declined 7% compared to the prior year, primarily due to unfavorable weather effects on visitation and revenue across both local and destination guests.
• Lift Revenue -- Dropped 5% despite a 15% decrease in visitation, supported by a 3% increase in North American pass sales prior to the season.
• Resort EBITDA -- Fell 9%, with the advanced commitment model and cost discipline partially mitigating weather-related declines.
• Pass Visitation -- North America saw a 17% drop in committed pass visitation, while lift ticket visitation decreased 10%, and overall U.S. lift ticket visitation fell 12% versus an approximate 20% decline for the broader industry.
• Rockies Snowfall -- Winter snowfall finished 55% below the 30-year average in the Rockies, representing the worst season on record for that region.
• Pass Sales Trends -- Spring pass units sold were down 10%, and sales dollars including tax fell 5%, with pass days sold down approximately 8%; the decline was most severe in weather-impacted destination markets.
• Lift Ticket Initiatives -- Introduction of super advanced lift tickets with a 30% discount for purchases made over 28 days in advance resulted in a 65% increase in such ticket sales.
• Epic Friends Ticket Usage -- Visitation from these benefit tickets rose 10%, despite a 10% fall in overall lift ticket visitation.
• Northeast Performance -- Lift ticket visits increased 8% at Vail's Northeast resorts, outperforming an estimated 8% decline for the broader Northeast industry.
• Passholder Segmentation -- Declines were concentrated among destination guests and in Colorado, Utah, and Lake Tahoe, while Whistler Blackcomb and Eastern U.S. markets experienced only low single-digit decreases.
• Young Adult Pass Segment -- Newly introduced young adult products "meaningfully outperform[ed] all the other age groups" and supported trade-up to core Epic products.
• Resource Efficiency Plan -- $106 million in annualized efficiencies projected by year-end, exceeding the initial two-year target; an additional $30 million in savings planned for fiscal 2028.
• Liquidity and Leverage -- Ended the quarter with $1.1 billion in liquidity, and net leverage at 3.5x trailing 12 months EBITDA.
• Capital Allocation -- Core capital spending expected to be $215 million to $220 million, with total capital investments between $234 million and $239 million; quarterly dividend maintained at $2.22 per share, and $45 million in shares repurchased year to date.
• EBITDA Guidance Update -- Fiscal year resort reported EBITDA is projected at $735 million to $755 million, at the lower end of the previous range, and net income attributable to Vail Resorts is expected to be $128 million to $162 million.
• Australia Market Momentum -- EPIC Australia PASS units rose approximately 26%, with dollar sales up about 31% heading into the summer season.

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RISKS

• CEO Katz stated, "our results this past year were significantly impacted by weather challenges across the Western United States," with the Rockies experiencing "the worst season on record for snowfall," leading to a 24% regional visitation decline and directly pressuring revenue and earnings.
• Spring pass sales decreased 10% in units and 5% in dollars, with destination markets including Colorado, Utah, and Lake Tahoe seeing "low double-digit unit declines" due to "softer demand following one of the worst ski seasons in history."
• CFO Korch commented, "even our most committed past visitation in North America declined 17% over the winter," highlighting the significant adverse impact of weather on both pass and lift ticket segments.

SUMMARY

Vail Resorts (NYSE:MTN) management confirmed record-low Rockies snowfall and acute weather disruption drove historically large drops in visitation and financial performance, with North American pass visitation and lift ticket volumes both sharply lower. Full-year resort EBITDA and net income guidance shifted to the lower end of previously disclosed forecasts, and destination-focused geographies experienced the steepest decline in pass sales and demand. The quarter showcased early positive results from targeted lift ticket discount programs and newly designed pass offerings, including meaningful young adult segment growth and Northeast market outperformance. The company focused on operational efficiencies and disciplined capital allocation to help offset pressured top-line results, while continued investment in technology, labor quality, and experience initiatives signaled management's intent to position for demand recovery and sustained long-term value creation.

• Company leaders cited "record guest experience scores, including year-over-year increases at every resort in the Rockies," despite the unfavorable operating environment.
• For the third consecutive season, the company achieved full staffing, higher seasonal employee return rates, and reduced labor-related injuries through workforce planning and efficiency initiatives.
• CEO Katz indicated, "we are not seeing any of those trends," between unlimited and frequency pass products, with unlimited offerings continuing to outperform.
• Passholder renewal rates were notably stronger than performance among new pass buyers, attributed to reduced conversion opportunities after a historic drop in visitation.
• Guidance for the upcoming year assumes stable operating expense planning and full staffing, with the company prepared to "be nimble with labor" if demand does not recover as weather normalizes.
• Epic Friends and "turn in your ticket" programs showed relative utilization gains, but management indicated that a full impact assessment requires a season of normal conditions and typical visitation.
• Management reported improved marketing ROI from increased, targeted media spend and flexible channel strategies, with plans to expand these approaches and refine marketing efforts based on recent learnings for the next selling period.

INDUSTRY GLOSSARY

• Epic Friends Tickets: Discounted lift tickets available to pass holders for friends, offering a 50% price reduction aimed at increasing visitation.
• Super Advanced Lift Tickets: Lift tickets purchasable at a 30% discount for buyers committing more than 28 days prior to use, intended to secure early visitation commitments.
• Resource Efficiency Transformation Plan: Vail Resorts' multi-year cost-saving program targeting structural expense reductions and operational efficiencies across business units.
• Pass Days Sold: Total number of ski days included in all pass products sold, providing management and investors a better volumetric indicator than units alone due to varied day entitlements.
• Unlimited Pass Products: Passes allowing unrestricted access during the season, distinguished from frequency products that limit the user to a fixed number of days.
• Frequency Products: Pass products providing a set number of ski days per season, typically at a lower upfront cost than unlimited options.

Full Conference Call Transcript

Connie Wang: Thank you, operator. Good afternoon, everyone, and welcome to Vail Resorts fiscal 26 third quarter earnings conference call. Joining me on the call today are Robert A. Katz, our Chief Executive Officer and Angela Korch, our Chief Financial Officer. Before we begin, let me remind you that some information provided during this call may include forward looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties as described in our SEC filings. And actual future results may vary materially.

Forward looking statements in our press release issued this afternoon along with our remarks on this call are made as of today, 06/08/2026, and we undertake no duty to update them as actual events unfold. Today's remarks also include certain non GAAP financial measures. Reconciliations of these measures are provided in the tables included with our press release, which along with our quarterly report on Form 10 q were filed this afternoon with the SEC and are also available on the Investor Relations section of our website at www.vailresorts.com. I would now like to turn the call over to Robert for opening remarks.

Robert A. Katz: Thanks, Connie. Good afternoon, everyone, and thank you for joining us for our third quarter earnings call. Before getting into the details around the corner, I want to take a minute to step back and discuss our progress against the focus areas I laid out last year. This call 1 year ago was my first opportunity speak with all of you after stepping back into the CEO role. At that time, I outlined the foundational advantages that differentiate our company, including our owned and operated network, advanced commitment model, and deep guest relationships. And our commitment to leveraging those strengths to deepen guest engagement, loyalty, and drive stronger revenue growth.

Now a year later and despite just going through a very challenging ski season, those priorities remain unchanged, and we are encouraged by the progress we have made in evolving our marketing approach and enhancing our lift ticket strategies. As I think it is well understood, our results this past year were significantly impacted by weather challenges across the Western United States. The historically adverse weather conditions we discussed last quarter continued through March and April, which drove meaningful pressure on visitation and revenue in the quarter particularly at our destination resorts in the Rockies. Which experienced the worst season on record for snowfall.

To give context on the magnitude of the impact of conditions on visitation this past season industry wide visitation in the Rockies, declined approximately 24%. When you look back over 40 years, the prior worst decline in visitation outside of COVID related closures for the Rockies was down 8% in 2012 which illustrates the unprecedented severity of the conditions and the anomaly we just experienced. Against that backdrop, our advanced commitment strategy and geographic diversity along with our resource efficiency transformation plan, and ability to use our integrated systems to remain agile on expenses. We are pivotal mitigating the impact from weather this past year.

At the midpoint of our updated guidance range, resort EBITDA will decline 14% from our original fiscal year 26 guidance issued back in September 2025, which is in line with the fiscal year 2012 missed to guidance. Despite snowfall in the Rockies being down approximately 30% from the previous low in 2012. And year over year, the midpoint of resort EBITDA guidance implies a 12% decline. Nothing to cheer about, but something to be proud of given the visitation decline in a historically high fixed cost business. Importantly, the challenging conditions did not shift our focus from delivering a high quality guest experience.

As we achieved record guest experience scores including year over year increases at every resort in the Rockies, where we were most impacted by weather. For the 3rd season in a row, we had full staffing in our resorts, a strong return rate for our seasonal employees, high employee engagement scores, efficient utilization of our labor hours due to workforce planning, and much better selectivity in our recruiting efforts as our need to hire new people continues to decline. We also saw a market decline in employee injuries per labor hour, typically another good indicator of improving culture. Overall, we are very pleased with our operational execution within the areas we could control.

We are also encouraged by the positive proof points we are seeing across the key strategies we outlined heading into the season. Evolving our marketing approach, focusing on driving lift ticket visitation, optimizing our pass product portfolio. I would like to provide an update on each of these. First, evolving our marketing approach. This involved increasing our focus on targeted paid media investments and adjusting the channel strategies to better reach and engage with guests.

Heading into the season, we saw positive results with a shift in approach as we were able to improve the past sales trend by 5 percentage points in the post Labor Day selling period relative to the earlier selling period which provided greater stability going into this past season. Additionally, with increased marketing investment and a clearer focus on our resorts, we saw increases in unaided brand awareness from destination guests for our top resorts. Second, we made changes heading into the season to focus on driving lift ticket visitation, which delivered early positive results.

We expanded our pass holder benefit program with Epic Friends tickets, at a 50% discount saw visitation from benefit tickets increase 10% despite a decline in overall lift ticket visitation of 10%. In addition, we introduced super advanced lift tickets offered a 30% discount for purchases made a month in advance which drove a 65% increase in tickets, sold more than 28 days out. And we did not see evidence of material cannibalization of other advanced ticket products. Combined with our shift in marketing approach, these strategies drove meaningful outperformance relative to The US industry in lift ticket visitation this past season.

Based on preliminary data as we saw our US lift tickets declined 12% while the rest of the industry lift ticket visitation was down approximately 20%. And in the Rockies, our outperformance was even stronger. there is no doubt a portion of our outperformance was due to the destination nature of many of our resorts, which may do better than local resorts in a tough weather year. But even in the Northeast, which saw excellent conditions, We saw an increase in our lift ticket visits of 8%. Versus the rest of the industry down an estimated 8% in the Northeast.

Finally, moving on to next season's pass sales, Spring pass sales were down 10%, and sales dollars including tax were down 5%. Which reflects softer demand following 1 of the worst ski season in history. While our overall pass sales decelerated in May from our April deadline, part of that was the timing of military sales. A portion of which got pulled forward into April due to us offering past benefit tickets to military pass holders for the first time and part was due to the timing of auto renew charges. Excluding auto renew and military, unit declines were very stable between the 2 selling periods.

While we are clearly not satisfied with any decline in pass sales, the outcome is not necessarily surprising given the severity of the conditions we just experienced this past season, and the massive growth we saw in past sales in the previous 5 years, especially in our frequency products, which saw the biggest decline this past spring. Encouragingly, third party data suggests that our spring past performance meaningfully outpaced the broader industry which we would attribute to all the new strategies we put in place for this year. Angela will cover additional details on the spring pass results.

But we do believe based on our own results and the broader market data, that a portion of the decline is likely due to delayed purchase decisions rather than reduced overall intent to ski next season. Creating an opportunity for improved pass performance in the fall selling season and or ultimately through in season lift ticket purchases next year. Looking back over the past several decades, US ski market data indicates that visitation typically fully recovers following a season with poor conditions if the subsequent season has normal conditions. And we believe we are well positioned to capture that visitation recovery with the pass and lift ticket product and marketing strategies we have developed.

That said, as unprecedented as this past season was, it is hard to know with certainty how any of this will play out. Looking ahead, we see a unique opportunity. To drive a step change improvement in the overall guest experience across our resorts. Through continued investments in Lyft, snowmaking, terrain, and talent while leveraging the scale and strength of our integrated network to implement new technologies and processes to enhance key elements of the guest experience. We are uniquely positioned to differentiate the guest experience as we have intentionally built a fully integrated, owned, operated network of world class destination and regional resorts. Connected through our pass and marketing ecosystem, and supported by a unified data and technology platform.

We have key initiatives underway in our gear, ski school, and dining businesses as well as every facet of guest engagement and communication and we will share updates on these efforts in the upcoming months, and throughout the year. Together, these initiatives will play an important role in driving future visitation growth and long term value creation. With that, I will turn it over to Angela to walk through the quarter in more detail.

Angela Korch: Thanks, Robert. I will briefly cover the results from the quarter, our updated fiscal 2020 guidance and spring pass sale results. Starting with the third quarter results, Weather conditions remained extremely unfavorable in the quarter, which put continued pressure on visitation and revenue across the business. Resort revenue for the quarter declined 7% compared to the prior year. Primarily driven by unfavorable weather conditions that impacted visitation and revenue for both local and destination guests. Particularly at our resorts in the Rockies, and in Tahoe. Lyft revenue declined 5% despite visitation being down 15% primarily as a result of North American pass sales increasing 3% heading into the season.

Resort EBITDA for the quarter was down 9%, as our advanced commitment model, cost discipline, and the geographic diversity of our portfolio partially mitigated the larger conditions headwinds. To expand on the magnitude of the conditions impact, even our most committed past visitation in North America declined 17% over the winter, while lift ticket visitation declined 10%. The impact was particularly severe in the Rockies where snowfall for the winter finished down 55% below the 30 year average.

Looking ahead to the fourth quarter, expect stable demand across our North American lodging and mountain resort businesses during the summer season, and we encouraged by early momentum in Australia, where EPIC Australia PASS units are up approximately 26% and units and dollars are up approximately 31%. Turning to full year guidance. We are updating our full year outlook with the resort EBITDA midpoint now at the bottom of the range we provided in March, consistent with our April update. We now expect net income attributable to Vail Resorts in the range of $128 million to $162 million and resort reported EBITDA in the range of $735 million to $755 million.

This change reflects the continuation of historically challenging conditions through March and April. Further pressured visitation late in the season. With the reduction in earnings, we now expect our cash taxes to be in the range of $75 million to $85 million We remain on track to exceed our initial 2 year Resource Efficiency Transformation Plan, of 100 million as we expect to achieve $106 million of annualized efficiencies by the end of this year. We also remain on track to deliver an additional $30 million of savings in fiscal 28, as outlined in our March investor conference presentation. From fiscal 26, this translates to an incremental $45 million of efficiencies year over year, before $13 million of onetime costs.

Our resource efficiency initiatives are providing a modest offset in a weather impacted year and reinforce our commitment to driving structural efficiency across the business. Turning to our balance sheet and capital allocation. Despite the difficult operating environment this year, we remain confident in the strength of our cash flow generation and the stability of our business model. Our balance sheet remains strong as we ended the quarter with liquidity of approximately $1.1 billion and net leverage of 3.5x trailing 12 months EBITDA.

We are also reaffirming our capital plans of approximately $215 million to $220 million in core capital spending, and $234 million to $239 million of total capital investments as we continue to invest in technology across our gear fiscal, dining businesses to enhance the guest experience. And ultimately to drive long term growth in our business. Our capital allocation priorities remain unchanged, starting with reinvestment of the business, and maintaining balance sheet flexibility to pursue potential acquisition opportunities followed by returning capital to shareholders. We maintain the quarterly dividend at $2.22 per share, and we will remain opportunistic on buybacks as evidenced by the repurchase of approximately $45 million of shares year to date.

On CAS sales, as Robert noted earlier, pass units and sales dollars through the May deadline were down 10%, 5%, respectively, including the impact of tax. Pass days sold were down approximately 8% reflecting a higher mix of unlimited products sold during the period. Pass performance to date has been driven by soft demand following the challenging conditions this season, evident in the fact that the weakness has been most pronounced in our more weather impacted destination markets, including Colorado, Utah, and Lake Tahoe, as well as among destination guests who typically travel to the Rockies. Which all saw low double-digit unit declines.

In contrast, we saw much stronger performance in our Eastern US markets, and at Whistler Blackcomb, where past units were down low single-digits. We are seeing positive performance in our new initiatives, as the new young adult product introduced this year saw results pacing well ahead of other age groups. And as I mentioned, our core high value unlimited pass products are outperforming frequency products. All of which reinforces the strength of our value proposition. We are also seeing better relative performance from renewing passholders and more pressure in pass sales within our new segment. As reduced visitation this past season has resulted in a smaller conversion audience which is typically a key driver of unit growth during this period.

While near term trends likely reflect delayed decision making, following a challenging season, we remain confident in the long term growth opportunity given our strong resort network and marketing strategies. In closing, while the season's results reflect an exceptionally challenging operating environment, we are confident in the strength of our business model and the progress we are making on our key strategies. We remain focused on delivering a differentiated guest experience. Strengthening our demand model, and executing the opportunities within our control. Over the long term, we believe these efforts position us well to drive sustainable growth and create value for our shareholders. With that, I will turn it over to the operator for Q and A.

Operator: Thank you. Again, please limit yourself to 1 question and 1 follow-up. And we will take our first question from David Katz with Jefferies. Please go ahead. Your line is open.

David Katz: Good day wherever you are. I wanted to ask Angela about the comment about the young adult product pacing well ahead of other groups. Could you put some context around how well that is doing put some know, maybe relative size on know, that group's ability, to make a difference. And, you know, just some more meat on the bones around that particular comment, please.

Robert A. Katz: Sure. I will comment on it, David. I think it is we are not going to put more specificity around it yet. We will provide more color as we get to you know, the end of, the full selling period, but it is definitely meaningfully outperforming all the other age groups and has been from the beginning. The other comment I will share is that, you know, what we are seeing is a good trade up from a lot of other products, of course, into the core Epic product which is what we were trying to do. So we see that as a real positive as well.

You know, in the end, I do not think it is a it is not something that is going to drive our overall results for the year. it is a mitigator, I think, to some of the other declines that we are seeing.

David Katz: Right. And frankly, if we were to break up the different cohorts within the pass group. Right? Like, could you maybe give us just a bit more detail across the board on how some of those are doing? And what your expectation is for those. You know, some up, some down.

Robert A. Katz: Yeah. I think what we are seeing is you know, pretty I think as we highlighted, as Angela I think 1 of the biggest things that we are noting is know, in Colorado, in Tahoe, in Utah, and in destination markets, particularly destination guests who visit who visited kind of our Rockies resorts or typically visit the Rockies resorts. Those are where we are seeing the biggest decline. And we are seeing, you know, much, much more modest declines in the Northeast and in Whistler Blackcomb. And so that really tells us, right, that this is very much a condition impact from last year as opposed to some broader structural, you know, impact.

You know, not surprised that, you know, following the season that we just saw, that, you know, the new segment of our pass sales is down a lot more, than renewal. But obviously, we are kind of heartened that the renewal piece is as strong as it is. And I think the other piece that, yeah, that we would mention is just that the unlimited products which we have been focused on quite a bit, you know, since last Labor Day, are really outperforming, our frequency products. And we are trying to move people from frequency up I also would say, yes. Obviously, the frequency buyer is the newer buyer to the overall program.

A bit more sensitive and unlikely to buy you know, as early given the conditions that we just went through.

David Katz: Helpful. Thank you very much.

Operator: Thank you. We will take our next question from Shaun Kelley with Bank of America. Please go ahead. Your line is open.

Shaun Kelley: Hi, good afternoon, Robert and Angela. Thanks for taking my question. Robert, I guess, big picture, we are getting a lot of questions that are a little too early on of what the impact is of what we learned today on, you know, next year's planning and sort of to not box you in on guidance. Maybe the easiest way to ask it is, based on what you know right now, does this these results and what you are seeing on the pass side in particular, does it really change much in terms of how you are you are planning for the business?

Staffing for next year and how you are thinking about the broader operating expense and planning outlook at this stage?

Robert A. Katz: No. it is not. I mean, I think when you look back, if historically, what you see is that, and this is over a lot of years, And, you know, both when you look at years where the Rockies did poorly, I think another great example is when you know, 2 years during the drought that we had in Tahoe, you know, and then you look at the year that had normal conditions, we see every indication that visitation comes fully back and, in some cases, surpasses even the year before. The bad year, like it did in Tahoe. Some of which I think is pent up demand that gets created during a season we just went through.

You know, that said, during those years, right, there were no pass programs like we had to you know, or have today, and certainly not pass programs to the extent that you know, we have grown them over the last, you know, 5 years. So it is not surprising to us that you are going to see some, especially in the spring, delayed decision making. This would be a perfect example of when you would expect that. And so at the moment, no, we are we are we are seeing a lot of this as timing.

Between spring and fall or even between fall and the season for lip tickets. that is why it is critical you know, in our minds that we not only have great programs on the speed and power side, but also for lift tickets. So we are planning for, yeah, you know, a normal season next year with normal conditions. Now that said, as we mentioned and I as I mentioned, as, you know, Angela mentioned, we are dealing with an unprecedented anomaly. So I you know, there is no there is no way that we can be exactly sure what it is going to look like. But right now, there is no change in our planning for next season.

Shaun Kelley: Great. And then just as my follow-up, you know, I could not help but notice both, I think, in the release and also in your prepared remarks, you talked about I think, it was a step function improvement on lifts, terrain. You mentioned snowmaking, but I think all of it built around the guest experience. And just wondering, if you could either elaborate a little bit more, or is there kind of a right time to hear a little bit more about initiatives there that we should look forward to listening into?

Robert A. Katz: Sure. I think, I think what I would say is it is kind of continued investments, you know, in the way we have in the past in things like lifts and snowmaking terrain, you know, upgrades to restaurants, things like that. I think where we really see the step change is taking the network of resorts that we have and using technology and new processes to obviously to then elevate like, through system wide or network wide investments the experience that guests have. So And so that could be you know, like MyEpic Gear, in terms of completely changing how guests experience gear. It could be around you know, ski school, like the digitization of ski school.

Which is something that we announced in the you know, we have other things that we are working on that will be announced to, you know, in the months ahead. Same thing with food, other things we are looking at on food. New things that we are looking at on how we connect with guests, address guest feedback, how critical, impactful the app is to everybody. And, you know, in our minds, we can create a bit of an ecosystem around our resorts that we think meets know, what guests of this generation, right, expect and at this time expect.

Which is technology that really makes--and new processes, that makes everything easier and better eliminates all the kind of hurdles that some people can have when they go skiing, but at the same time does not get in the way of their experience on snow. And we think we are just uniquely, you know, positioned to do that. You know, as well as the marketing piece. Right? Obviously, we have the ability to market both pass and lift tickets to these guests with a kind of unified marketing approach.

But at the same time, and I think we saw some of the benefits of this, still elevating each resort's brand, elevating the experience, and, you know, unique connection that each resort has to our guests.

Shaun Kelley: Thank you.

Operator: Thank you. We will take our next question from Stephen Grambling with Morgan Stanley. Please go ahead. Your line is open.

Molly Baum: Hi. Thanks so much for taking our question. I guess 1 follow-up to what you talked about, the deferral of pass purchasing. Do you expect heightened trade down to maybe the lower frequency pass products if demand does materialize later in the selling season? And I guess, to the extent that you can comment, I know not all of these products existed back then, what have you seen historically after a weaker weather year when it comes to you know, the different pass products?

Robert A. Katz: Yeah. I think it is a little challenging because, obviously, when the last time certainly, the Rockies went through this, you know, we actually saw a pass growth the following year, but that was at a much earlier stage in the overall past maturity cycle. And we and we did not have frequency products. Like we have today. You know, at this point, I would say that it is hard to say. I think we are not seeing, you know, trade down, you know, in our numbers. And obviously, the strongest performers right now are unlimited products, and higher value epic products versus regional products. So at the moment, we are not seeing any of those trends.

But we will, you know, we will see. You know, I think we are we are in a unique moment. You know, in the end, you know, we do not think this is about people saying that they are not going to ski next year. We think it is about people not willing to make that commitment today. And yeah, obviously, unprecedented season that we just went through. So hard to say how it will play out when we get through, you know, the fall.

Molly Baum: Got it. that is helpful. And then 1 other 1. Know, I know you talked a lot about, you know, the integration of the app and fiscal 2028, bringing MyEpic Gear into the app. But, you know, as we kind of think about that transition, particularly on the Epic Gear launch, does that transition period create any notable revenue gap in 2027 as we are going to lose the subscription revenues. Is there anything to call out there? Know, in terms of the volatility we might see? Thank you.

Robert A. Katz: I mean, I think what I would say in FY 2027 for May, it Epic Gear is that it is definitely a transition year where we are moving from kind of what we were offering before to taking kind of the ability to select your own gear and rolling that out for you know, all of our demo skis that we are gonna sell in year. So, obviously, what I would say is it is not from a financial perspective, no. We do not see any issue there. From an experience perspective, it is kind of going from a very small high touch experience. But very few number of guests.

To really rolling it out to that highest end guest, but across a much broader base of skiers. And then in FY 2028, you would see the full experience you know, with high touch points and everything else. Being rolled out to yeah, to everyone who rents. And then they will you know, we will have gradations obviously, different parts of the experience at that point.

But the ability to select your gear, the ability to have an app and get the gear wherever you want, really reducing all these friction points, the ability, you know, once you have gone through and tried on the boot, or use the ski and then you like it, we can actually have that all ready for you without you coming in again trying anything on. Or even if we are delivering it to your unit, or condo, you know, you do not we do not have to just drop it off, and you can pick it up. it is not like we have to actually, you know, have people go through the process of the fitting.

So all of that is really an FY28 piece, but FY 2027 will be the first step towards that.

Molly Baum: Got it. Thank you so much.

Operator: Thank you. We will take our next question from Arpine Kocharyan with UBS. Please go ahead. Your line is open.

Arpine Kocharyan: Hi. Thanks. Very much for taking my question. This is somewhat related to an earlier question. But, you know, assuming the current trend of down mid single digit in dollar sales for the past product continues, that means the Lyft part of the business has to come in at a double digit range. For overall to be flattish, which is not, I guess, inconceivable after a tough year, but probably hard to do. At the same time, you are, you know, given some nuggets of positive indicators in the release kind of suggesting historically visitors seem to come back after a tough year, even after they kind of delay purchase this purchase decisions initially.

I guess, you talk to the potential or perhaps path for the lift business to grow at a double digit range? Based on historical patterns, but also programs you might have in plan for getting lift visitors? And then I have a quick follow-up.

Robert A. Katz: Yeah. I think if you look back as what I would say is maybe the reverse of this. So when we were growing season pass, revenue, 20 plus percent per year in the double digits for a long time, We absolutely saw a significant decline in lift ticket visitation as people move from passes from lift tickets to passes. And so we do think we have every opportunity to see strong growth in lift ticket visitation if the path business comes down. So we do think there is a there is a fluid movement between the 2 products. Does not mean that it is it is perfect.

It does not mean I cannot exactly say because obviously, we are in a unique environment exactly how that will play out. But we do not think there is any kind of you know, artificial cap to how we can drive lift ticket growth. It really comes down to what the demand is. And I think, you know, for us, the key thing was having products available for people at, you know, more accessible price points. And so there, I think, certainly, our Epic Friends tickets, the super advanced lift tickets, you know, that has performed very well and, obviously, only in its first year, not a ton of awareness.

So we see that as a huge opportunity for next year. We were you know, very selective, last year in picking certain resorts in certain time periods to be more aggressive on specific lift ticket products. And I think you will continue to see us do the same thing ahead of going into next year. Now that said, it will always be that the best deal is gonna come from a path And so as we get certainly towards the end of the pass selling season, we will make sure that we are reminding everybody of that fact you know, before we go into next year.

And, obviously, we do have our you know, turn in your ticket program where folks who might have used an Epic Friends ticket this year or bought any lift ticket can obviously use that to buy a pass as they go into next year.

Arpine Kocharyan: Okay. that is that is helpful. Thank you. And then, you know, could we go over the levers you have to protect EBITDA, right, given mid single digit range decline so far at least in past products. Seems like you might see that improving a little bit later in the season. But sort of top line dynamics, but also cost side of things. What kind of underlying cost inflation we are looking at and how you look at shape of that EBITDA recovery after an anomaly year? With an underlying with understanding that, you know, ultimately, a lot also depends on strength of the Lyft business once we get there, I guess.

Robert A. Katz: Yeah. Well, first of all, we will go into next you know, into FY 2027 with an opportunity to really see, right, the kind of run rate improvement in our resource efficiency transformation efforts because, obviously, we are we are delivering on all of that for FY 2026, a portion of which is gonna really roll into FY 2027. Then we will have new initiatives that we will be talking more about as we go forward, portion most of that will be FY 2028, but a portion of that will also hit FY 2027.

And then, obviously, yeah, I think we have given a unified approach that we take towards how we schedule labor and all of our workforce planning, we can be nimble with labor. To the extent that we see that visitation decline, but we are going into next season looking for full staffing. And really expecting, you know, assuming that the conditions are good, that we are going to get that full visitation. So we are not gonna pull back on the guest experience. But I think as we saw this year, yeah, we, you know, if that is what happens, we certainly can make adjustments. But that is not what we are gonna be planning for.

Arpine Kocharyan: Thank you very much.

Operator: Thank you. We will take our next question from Laurent Vasilescu with BNP Paribas. Go ahead. Your line is open.

CMCo: Hi, guys. Thanks for the question. Maybe kind of going continuing on to the past selling season. As you kind of go through the rest of the year, or summer, like, how do you think are you changing any of the, maybe, strategies or, like, marketing to kind of drive a little bit of an acceleration, or is it kind of using the same maybe, like, marketing approach as you have the last maybe couple months?

Robert A. Katz: Yeah. I would say that we you know, we are constantly looking at whatever our results are for, you know, the last deadline especially and saying, did we learn? What can we do differently? Where can we lean in more 1 place or another? And we are taking all the learnings that we have in spring, and we are gonna put them to work as we go through Labor Day and through the rest of the season. And I do think we have opportunities. You know, some of the new approaches that we launched post Labor Day last year we have an opportunity, obviously, to put those in along with the learnings that we have through spring.

Into this year's Labor Day And, yeah, we are we are you know, you know, in the midway, we tend not to make big product changes. Because we feel like, yeah, it is critical for everyone to be making decisions on the product set that we have and important that the folks who buy earlier always get the best deal. We are not gonna change from that. But in terms of, the you know, how we go to market, in terms of the dollars that we invest on media, yeah, that is always gonna be about, you know, the numbers that we are seeing.

And we did see good results from, you know, the incremental dollars that we put to work last fall. We saw good returns from the incremental dollars that we put together that we put to work this spring. So that is definitely gonna be front of mind as we go, into the fall.

CMCo: Okay. Got it. Thanks. And then maybe going continuing on to the question around the kind of lift or window ticket demand into next year. So as you mentioned, you know, following a kind of challenging season, you might expect conditions to normalize and visitation to recover. And I guess if you know, past units are down a bit and maybe then that means that lift window tickets are higher. I guess, in a way, that also creates a positive mix effect where, like, maybe the price per, you know, window ticket visit maybe is higher. Is that something we should be thinking about in terms of, like, I guess, the incrementality of window ticket visit?

Into next year in terms of EBITDA?

Robert A. Katz: Yeah. Yes, absolutely. And I and I would say, it is important to remember that yes, we are down, you know, know, 10% units, 8% in days sold. You know, after this ridiculously horrible winter, we are still so far ahead of where we have been in any previous bad season. In terms of advanced commitment in total. So if you think about how much advanced commitment we have at this point in front of next year versus any year we have had historically, yeah, like, where we have had a bad season like this. No, no, no. We are well ahead. So, actually, in some respects, we are in a much stronger position.

As we are thinking about next season even though we had a bad year last year. And, yes, there is the opportunity. Any you know, if somebody is going to not buy a pass and is gonna wait to buy a Lyft ticket, even at the lower prices that we are putting out for lift tickets, they are gonna be paying more. And so that is absolutely our lift ticket Effective ticket price will go up I am sorry. Our overall effective lift tick our overall effective ticket price will go up as they move from pass to lift tickets. Now that said, that is not what we want.

Still want people to be in the advanced commitment bucket, but yeah, we have to have every lever available to us. Great.

CMCo: Thanks. Good luck.

Operator: Thank you. We will take our next question from Jeffrey Stantial with Stifel.

Jeff Stantial: Hey, good afternoon everyone. Thanks for taking our questions. Maybe starting off on past sales, if we go back to this time last year, Robert, I think you talked to some resilience in purchasing behavior through Labor Day and some of the choppiness we were seeing back then in consumer sentiment. Obviously, weather is going to be the bigger impact so far this year. But just curious if you think that macro uncertainty may be factoring in as well if you look at trends so far this selling season.

And then historically, can you just remind us do you typically see when gas and flight costs are higher, What sort of impact do you see to visitation behavior across the local and destination cohorts? During the season?

Robert A. Katz: Yeah, sure. I mean, I would say right now, tough to break out kind of any kind of macro impact from the weather impact and by, you know, the conditions impact from last year. And I think you know, based on some of the data we were talking about in terms of how Whistler is doing or the East versus other markets, Definitely seems like this is much more of a of a conditions driven, you know, decline. I think when you look back historically, obviously, the further you travel, the harder. A lot of times, you do see people if they have an issue with the, you know, plain cost you know, they are they may drive.

So we may see more you know, and stronger local visitation. At the same time, a lot of people will not go and, you know, fly internationally to the extent that the cost of those flights are even higher. Obviously, we are seeing some cut back on some of the European flights and things like that. Asia. So, ultimately, that could help the overall destination the US destination or American destination business here. So I think our business provides a natural hedge of sorts, I think, in tougher economic times, because of how core you know, kind of skiing is and the kind of recreation component. Of our business. it is not all just vacation. Spend.

But in the end, right now, I think, you know, hard to say what the overall economic environment will be next year. And so we are focused much more on the kind of unique situation we are dealing with you know, rather than the overall economic environment right now.

Jeff Stantial: that is great. And then you actually you know, I think you touched on this a little bit, but as a corollary question that we get from investors all the time sort of how much impact the Transatlantic or Transpacific outbound tour travel is having on visitation, you know, just given that value proposition and seems to be a lot of word-of-mouth marketing benefit over the last, call it, 2 or 3 years. Robert, I am curious if, you know, when you look at the data, how material do you think this trend truly is versus just more of a narrative thing?

And, you know, if it is material, is there-- you know, obviously, flight cost and things of that are gonna help you if they stay where they are. But, you know, from more in terms of the levers that you can pull, is there any opportunity within the marketing strategy or otherwise to sort of you know, go after this lapsed guest base that is that is sort of opted for international?

Robert A. Katz: Yeah. We do not see that as a material driver. Right? So, you know, and obviously, we have data because our passes provide, right, access both in Europe and in Asia, and not seeing a material increase in the usage of that. I think, you know, in unique locations, yes, it can be meaningful to a resort in Europe or Asia. US business they can see a real increase. But in terms of the overall visitation that is happening, the, you know, kind of North American ski industry, no, I do not think it is material either way.

I think it is-- yeah. it is a kind of nice kind of, you know, bucket list type thing that people add on. You know, every now and then, but it is not really replacing the normal visitation. I would say, you know, the other side of it, which I do not think is changing anytime soon, but really what we have seen over the last 5 to 7 years is a decline in inbound visitation into The US. And so between lots of different factors, part of it that, you know, US dollar, others, you know, just the, you know, overall inbound tourism, which is not just about skiing, but about everybody in tourism.

I mean, I think that is the much bigger trend. That international visitation to The US for a lot of travel, but certainly for the ski industry has gone down a lot. And so if there is any normalizing trend ultimately over time, that is our hope. And I know that, you know, in addition to us, there is lots of other people in The US travel business trying to promote that.

Jeff Stantial: Thanks very much.

Operator: Thank you. We will take our next question from Benjamin Chaiken with Mizuho. Please go ahead. Your line is open.

Ben Chaiken: Maybe 1 on 2012 with a cost base of just over $2 billion. As we think about next season, other than inflation, how should we think about the flow through of any incremental revenues And then separately, are there any moving parts you would flag? I guess, for example, were there any 1-time areas were pulled back this year we should consider that need to come back as revenue presumably returns? Thanks.

Angela Korch: Yeah. Thanks for the question. I think the biggest piece to think about is obviously a variable component that we had this year of where we were able to manage to the demand levels and the revenue. That, of course, would come back with revenue, as you would expect, outside of just kind of inflation on our base operating cost. Then, as Robert mentioned, we have the year over year benefit going the other way on our resource Efficiency Transformation. We expect to be at that $106 million relative to-- right, we were at the 82 cumulative point this year. So you will see a year over year benefit from that.

Outside of that, it is really other things that just normally track with performance, things like our performance management compensation that you should think about that will return obviously in a normal environment next year.

Ben Chaiken: I guess maybe following up on that, the I guess you were referring to variable cost components associated with visitation. And then for just overall. Right? On revenue. Say that again?

Angela Korch: Yes. The variable costs that go with the revenue. Right? Things like credit card fees and taxes and all of those types of things that go with the revenue that we, you know, would expect to come back with visitation returning Okay.

Ben Chaiken: And then maybe just 1 from a modeling perspective. I think this year saw what presumably is elevated effective ticket price I assume that is basically just from season pass dollars juxtaposed against lower visitation from weather. Guess, am I thinking about this correctly? And is there is there any way you could help us quantify this drag next season and then any other offsets you would consider? Thanks.

Angela Korch: Yeah. You are correct. The effective ticket price this year, when we have past visitation in North America down 17%, but obviously had the revenue locked in. that is having a very large impact on effective ticket price overall. So, what I would do is I would separate out the past revenue piece from the lift ticket piece to really get more of a comparative of what you would expect in terms of the pricing change year over year. Versus just, right, the visitation impact from this current season.

Ben Chaiken: Thanks.

Operator: Thank you. We will take our next question from Chris Woronka with Wells Fargo. Please go ahead. Your line is open.

Anthony Blondio: Hey, guys. Thanks for taking my question. I just wanted to ask about pass trends versus peers. I think you mentioned past sales are outperforming others in the industry. So can you just dig into that a little bit? Just anything to frame the magnitude there and the different drivers of that delta.

Robert A. Katz: Yeah. it is hard for us to, you know obviously, there is not a perfect information on that since we are the only 1 that is publicly reporting. But we are basing that on just you know, some third party entities that try and track transaction volume and other things in the marketplace. Yeah. So it is hard to speak, with a lot of precision on any of it, but to the extent yeah, that we are outperforming, we do think it is from all the things that we did going into past selling season, which is, you know, we are we are spending more on media.

We are we have the, you know, the young adult pass, which we think was really priced well. We also think the message of that young adult path a really strong message for us as we went through the season. And, you know, we also just, you know, leaned into completely new marketing tactics and approaches than we had last spring. And because a lot of the new things that we started doing really were last fall. And so we feel like that helped as well.

And, you know, we had a really strong year in terms of guest you know, experience at our resorts even with you know, I think the down you know, snowfall and conditions that were tough. I think I think there was a sense broadly that on the things we could control this season, I think we did really well. Certainly feel that way, and I think a lot of our guests feel that way. And I think that gives confidence you know, that as we go into next season, yeah, that we will, of course, put the put everything we have into making it the absolute best season possible.

Anthony Blondio: Got it. that is helpful. And then just maybe on M&A, can you just talk about, what you are seeing out there from an M and A perspective? Maybe how the abnormally poor season might be influencing decision making from operators that might be looking to sell assets?

Robert A. Katz: Yeah. I am not going to comment on M&A. I never do. But in terms of the specificity. But I would say, historically, I have not seen situations where down either economic years or down, you know, snow years trigger people to immediately sell. I think everybody feels like no 1 wants to be selling on it in a down year. I think sometimes it reminds people, though, that you can have these tough years. And so sometimes the year after, they are even 2 years after, right, there is a different mindset of ownership. You know, obviously, a lot of resorts have transacted in North America over the last you know, couple of decades.

So of the folks that are still owning resorts, I think, are doing so because this is a long term family commitment that they have. So whether, you know, a year like this is gonna impact them is kind of unclear.

Anthony Blondio: Thanks so much, guys.

Operator: Thanks. We will take our next question from Patrick Scholes with Truist Securities. Please go ahead. Your line is open.

Patrick Scholes: Hi. Good afternoon, Robert, Angela, and everyone. Can you just talk a little bit more about this I believe, a new inclusion of a KPI with called days sold. And, you know, certainly, it comes with a footnote on it about some metrics in there. Talk a little bit about why, you know, why including that now. I assume it has to do with the prevalence of frequency products, but, you know, a little bit more color. On that. And, you know, anything else we should be thinking about watching that KPI specifically. Thank you.

Robert A. Katz: Yeah. I think it is it is something that we have been looking at internally for a while, and it obviously tries to say, you know, what we have been reporting on units, but, you know, if you sell a you know, an Epic pass or an Epic local pass, that is 1 unit. If you sell an Epic 1 day, that is also 1 unit. that is the way we have been tracking it. But obviously, those are 2 completely different products. And so internally, we have been tracking days sold because it tells us how many days of skiing we have.

Now that said, like, we do not-- we, of course, do not know when we sell a product how many days they are gonna use it. So just for simplicity internally, and now we are sharing it externally, it highlights yeah, that if we are mixing up in the kind of frequency of that unit, so to speak, yeah, then that will show up in the days sold. Versus just units. So, you know, I think we started talking about that publicly at the investor conference. And I think we said, you know, talked about that we might continue to report on that, and we are going to.

And in the end, it is what we track most closely in terms of, you know, thinking about overall revenue. And how many visits we are gonna get out. Now, obviously, it is important to us The units are important too. Because we like to see all, you know, the guests. Obviously, that is kind of a transaction piece. So it is it is still important, but not quite as important as the days sold, which you know, tracks, yeah, just a little closer to how much volume people are buying.

Patrick Scholes: Thank you.

Operator: Thank you. We will take our next question from Brandt Montour with Barclays. Please go ahead. Your line is open.

Brandt Montour: Hi, everybody. Good afternoon and thanks for taking my question. So Robert, you mentioned the turn in ticket program, the Epic friend ticket program. And I apologize if I missed this, but how are those programs being utilized so far? Is it in line with your underwriting, better or worse? Just given the nature of those products and who owns those options, you know, is there an obvious characteristic as to when you think they would turn them in to buy the pass throughout you know, the cycle here?

Robert A. Katz: Yeah. I guess what I would say is, yeah, they are-- you know, it is kind of early, you know, because a lot of that is going to-- you know, we think probably happens later. But right now, yeah, we are seeing you know, improvements in both the turning your ticket categories across the board. But obviously, ultimately, we need to see how it goes out through you know, the remainder of the season because the selling season for passes. So it is a little early to say. And both of those programs performed you know, really well from our standpoint on a relative basis. Obviously, we did not see the full benefit of them.

Because, of course, overall visitation was lower, and we had serious headwinds with conditions. But on a relative basis to other lift ticket products, they did well. But from a kind of turning your ticket perspective in terms of the impact they can have on the past business, we would really need to see, like, a normal full season. And see how many people actually buy it in that context and then how many people convert into passes. You know, following that.

So this will be a tough year to make a full assessment of it, but the flip side to it, I would say, you know, we felt really good about introducing some of these new aggressive products last year. In what turned out to be a tough winter because, obviously, it allowed us to have product that we were promoting that made it easier for people to buy. And I said that is the same thing with passes. Obviously, it is a tough, tougher pass-- and sell-- pass selling season right now. And so the fact that we have these other avenues for people to get in, you know, we see as all possible.

Brandt Montour: Okay. Fair enough. A second question. On the competitive environment. You guys seem like you are gaining share in terms of past sales versus your competitors, and specifically, in that younger cohort where you guys adjusted the price lower, you know, do you have any concern that competing systems who are doing worse than you right now may get more aggressive in their pricing or promotions especially in that younger cohort, try and win some share back and then how that could sort of impede your ability to try and improve past sales throughout the next, you know, 3 to 5 months.

Robert A. Katz: Yeah. What I said, I you know, it is hard of course, I have no idea. Right? it is hard to know. And I think we take our approach. of it. there is a little bit of a competitive dynamic that we are looking at there. But a part of it, I think, is as we shared in the investor conference was, you know, we looked at how much we increased past pricing. Over the last 4 years in both adult and young adult And what we realized was in the adult category, yeah, actually, we did quite well on that. But in the young adult category, we did not.

In a way, this is almost like a rollback of some of the increases that we took before. You know, look, I think 1 of the benefits we have in you know, again, I have no idea how other people are gonna make pricing decisions and, you know, that stuff's obviously on them. But 1 of the benefits we have here is that because we own right, all of our, you know, resorts and have only limited partners, you know, when we increase or decrease price, we are not constrained by the relationship that we have with the partners or how we are paying them or not paying them or how we are spending on media or not.

I mean, all of those things are easier. We also get the benefit of ancillary, right, in all of our resorts. Not just in the owned resorts. You know, you know, or a limited number of resorts in the past. So to the extent that we are being more aggressive with young adults, no matter where they ski, largely in our North American network, we are getting the benefit of that full 100% of lift revenue plus we are also getting the benefit of everything they spend on the mountain. So, you know, I can see how that makes it a little bit trickier if you do not have that setup.

And I think the same is true, right, you know, for all these other things. We are doing as we move back and forth between path and lift tickets. We are doing this in a very holistic manner. It can be harder to do when you know, it is a little bit more balkanized. So for us, you know, in the end, we are we are not really we are not really in a reactive mode at all. We are we are really in a how do we optimize. And I think that is what I said when I first came in.

We were looking to optimize our past portfolio and make decisions that were pretty independent of what others were doing. Great. Thanks for the thoughts, Robert.

Brandt Montour: Yeah.

Operator: Thank you. This concludes the Q and A portion of today's call. I would like to now turn the call back over to Robert A. Katz for closing remarks.

Robert A. Katz: Thank you. While this year presented weather challenges and tougher financial results, it also sharpened our focus and reinforced the work we are doing to address the end to end guest experience. From marketing to products, to the entire on mountain experience, On that point, I wanna thank our frontline teams for their unwavering dedication throughout this exceptionally challenging season. As we look ahead, we built an integrated network and platform that positions us to deliver a consistent, differentiated guest experience, strengthen loyalty, and drive long term growth. This network allows us to deliver a more consistent--I mean, more consistent experience at every touch point at scale.

Which remains the heart of everything we do and I am confident will drive us to the next phase of our growth. Thank you all for your time today.

Operator: Thank you. This concludes today's Bell Resort. Fiscal Third Quarter 26 Earnings Conference Call and Webcast. You may disconnect your lines at this time, and have a wonderful day.

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