Looking back on leisure facilities stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Vail Resorts (NYSE:MTN) and its peers.
Leisure facilities companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted their spending from "things" to "experiences". Leisure facilities seek to benefit but must innovate to do so because of the industry's high competition and capital intensity.
The 12 leisure facilities stocks we track reported a strong Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 13.8% below.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
In light of this news, leisure facilities stocks have held steady with share prices up 2.1% on average since the latest earnings results.
Weakest Q2: Vail Resorts (NYSE:MTN)
Founded by two Aspen, Colorado ski patrol guides, Vail Resorts (NYSE:MTN) is a mountain resort company offering luxury experiences in over 30 locations across the globe.Vail Resorts reported revenues of $265.4 million, down 1.6% year on year. This print was in line with analysts’ expectations, but overall, it was a softer quarter for the company with a miss of analysts’ skier visits and earnings estimates.
Commenting on the Company's fiscal 2024 results, Kirsten Lynch, Chief Executive Officer, said, "Our overall results for the year highlight the stability and resilience of our advance commitment strategy."
Unsurprisingly, the stock is down 7.8% since reporting and currently trades at $173.18.
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Best Q2: Life Time (NYSE:LTH)
With over 150 locations and gyms that include saunas and steam rooms, Life Time (NYSE:LTH) is an upscale fitness club emphasizing holistic well-being and fitness.Life Time reported revenues of $667.8 million, up 18.9% year on year, outperforming analysts’ expectations by 5.2%. The business had a stunning quarter with an impressive beat of analysts’ same-store sales and earnings estimates.
Life Time achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 25.7% since reporting. It currently trades at $26.14.
United Parks & Resorts (NYSE:PRKS)
Parent company of SeaWorld and home of the world-famous Shamu, United Parks & Resorts (NYSE:PRKS) is a theme park chain featuring marine life, live entertainment, roller coasters, and waterparks.United Parks & Resorts reported revenues of $497.6 million, flat year on year, in line with analysts’ expectations. It was a slower quarter as it posted a miss of analysts’ earnings estimates.
Interestingly, the stock is up 6.5% since the results and currently trades at $49.73.
Topgolf Callaway (NYSE:MODG)
Formed between the merger of Callaway and Topgolf, Topgolf Callaway (NYSE:MODG) sells golf equipment and operates technology-driven golf entertainment venues.Topgolf Callaway reported revenues of $1.16 billion, down 1.9% year on year. This result lagged analysts' expectations by 2.8%. Overall, it was a slower quarter as it also recorded underwhelming earnings guidance for the full year.
Topgolf Callaway achieved the highest full-year guidance raise among its peers. The stock is down 24% since reporting and currently trades at $10.64.
Planet Fitness (NYSE:PLNT)
Founded by two brothers who purchased a struggling gym, Planet Fitness (NYSE:PLNT) is a gym franchise which caters to casual fitness users by providing a friendly and inclusive atmosphere.Planet Fitness reported revenues of $300.9 million, up 5.1% year on year. This result beat analysts’ expectations by 3.5%. It was a very strong quarter as it also put up an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.
The stock is up 14.3% since reporting and currently trades at $82.33.
This content was originally published on Stock Story
