- Cedar Fair reduces EBITDA and Revenue guidance for the second time this Summer.
- Lower 2014 performance does not change expected growth of distribution.
- EBITDA growth remains on track to hit long-term target a year ahead of schedule.
Cedar Fair (NYSE:FUN) issued a press release today reporting "preliminary year-to-date net revenues through Monday, September 1, 2014, were a record $939 million, on attendance of 19.0 million." More importantly, CEO Matt Ouimet announced the following reductions to its forecast:
...based on trends through Labor Day, the Company is lowering its earnings guidance. It now expects to generate full-year net revenues between $1.15 billion and $1.17 billion and full-year Adjusted EBITDA between $425 million and $435 million.
This is the second time that guidance has been lowered. When Q2 results were released, the company also lowered guidance. At that time, I wrote about the changes:
As a result of worse than expected results so far this year, the company reduced the upper end of guidance. The new figures are revenue $1.16-$1.18 billion (vs. previous guidance of $1.16-$1.19 billion) and Adjusted EBITDA $435-$450 million (vs. previous guidance of $435-$445 million).
The less than expected attendance, revenue and EBITDA were blamed on unusual Winter weather patterns that caused delayed school summer vacations. There was also a water main break that forced the closure of its flagship park in Sandusky, Ohio during an important week-end in early June. As the company's key summer season has ended, investors have a good indication that results will be less than expected. Attendance through October will be driven by Halloween themed events, and while these have extended the season in recent years, weather becomes an increasingly important factor.
When I previously recommended buying Cedar Fair, it was all about the attractive and increasing yield. That story remains intact, and the company remains on track to achieve its longer term 2016 target of $450 million of EBITDA (announced 2 years ago) a year ahead of schedule.