Disney's theme park segment today reported an 8% increase in operating income on a 7% increase in revenue for the three months ending December 30, 2023, setting records for the company.
The company's Experiences segment reported $9.132 billion in revenue for the first quarter of its 2024 fiscal year, up from $8.545 billion for the same period one year ago. The increase was driven by a 35% jump in revenue at Disney's international theme parks.
The international parks also drove the Experiences segment's operating income growth for the quarter. Disney reported $328 million in operating income from those parks for the quarter, up from $79 million for the same period one year ago. That offset a $36 million decline in operating income from Disney's domestic parks.
Disney attributed that decline to Walt Disney World in Florida, which saw lower park attendance and fewer occupied room nights. The Disneyland Resort in California did see higher attendance and guest spending, though that benefit was largely offset by increases in costs. The Disney Cruise Line also saw an increase in passenger cruise days, partially offset by higher costs.
As for the international parks, attendance was up in Hong Kong and Shanghai, where World of Frozen and Zootopia opened during the quarter, respectively. Shanghai also benefitted from not suffering from any Covid-related closures, as it did during the same period in 2022. However, attendance was down at Disneyland Paris for the quarter.
"Our strong performance this past quarter demonstrates we have turned the corner and entered a new era for our company, focused on fortifying ESPN for the future, building streaming into a profitable growth business, reinvigorating our film studios, and turbocharging growth in our parks and experiences," Disney CEO Bob Iger said. "As we build for the future, the steps we are taking today lend themselves to solidifying Disney's place as the preeminent creator of global content. Looking at the renewed strength of all of our businesses this quarter – from Sports, to Entertainment, to Experiences – we believe the stage is now set for significant growth and success, including ample opportunity to increase shareholder returns as our earnings and free cash flow continue to grow."
In an investors call following the earnings release, Disney's new CFO, Hugh Johnston, provided new detail on Disney's planned investment push for its theme parks.
"We plan to invest approximately $60 billion into the business over the next 10 years, of which approximately 70% is earmarked for incremental capacity-expanding investment around the globe, which we expect to generate attractive returns," Johnston said.
When asked to clarify, Iger responded, "We're already hard at work determining where we're going to place our new investments and what they will be. You can pretty much conclude that there'll be all over - meaning every single one of our locations will be the beneficiary of increased investment and thus increased capacity - including on the high seas, where we're currently building three more ships."
"I'm not going to give you much more of a sense of timing, except that we're hard at work at getting these things conceived and built. We've got a menu of things that will basically start opening in 2025, and there will be a cadence every year of additional investment and increased capacity."
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Its interesting to see the same themes in Disney's results to Universals. Either Florida has run out of pent up demand from the pandemic, or its got a problem.
@Chad: I live in Florida and 85% of the year it’s a humid swamp of ever-increasing oppressive heat. Not sure if that metric is what’s affecting business, but if I were given the chance to place a wager I’d bet on it being at least part of the problem. Cold weather months like January are no longer the “slow season” months that they used to be so reliably.
Start the rumor now: $30 billion of Disney's CapEx for the parks will be a dome over Disney World.
Hey, I mean Walt envisioned one over the original concept for Epcot right? Your move Disney, your move…
A long time ago, a commentator (I don't remember who) compared the operation/management of a theme park to running an airline. Both are VERY labor intensive. Both have technical and mechanical requirements. And both are guest services oriented. Of course Universal and Disney are operating diverse platforms -- platforms that have great synergy. Especially Disney (theme parks, studios, television, streaming, cruise lines, resorts, gambling [ESPN BET], time share, video games, etc.).
With everything Disney's executive leadership has nurtured into development, and with the (often overlooked) recruitment and active participation of Tom Staggs, Kevin Mayer and Hugh Johnston, I can't see how someone can be anything but bullish regarding Disney's future.
Which makes me ask, why the hell is anyone paying any attention to a twirp like Nelson Peltz?
Hollywood Reporter (02/08/24): "So, Wall Street analysts had much to digest overnight, but most came away with optimism and increased stock price targets for Disney. In pre-market trading on Thursday, Disney shares were up more than 7 percent above $106."
9:54 AM EDT - Share Price: $108.73.
Again, why the hell is anyone paying any attention to a twirp like Nelson Peltz?
@TH: pray tell friend, for those of us not in the know, who the hell is Nelson Peltz? Asking in earnest, I honestly have no clue
@fattyackin: I will take the "teach a man to fish" approach. Type "Peltz Disney" in your friendly neighborhood search engine.
Touché. I always shoot for the laziest, most minimized effort first but I see you’ve played “Askey Typey” before….
Search I shall
Florida has a problem and if it doesn't turn the boat around soon Universal is going to open Epic with the problem still in place. Busch Gardens, SeaWorld, Disney, Universal and even Legoland are all struggling in Florida right now.
Sure, it's hot and muggy in Florida, but it's always been that way. The real problem is that Florida's government is openly hostile to women and girls, to Black people, to migrant (often hispanic) laborers, and to the LGBTQ community. Most families tend to include (or at least have sympathies for) one or more of those groups, and therefore don't see Florida as an inviting place.
I grew up going to Florida every summer of my life, but I don't go there any more because I'm not down with bigoted white nationalist nimrods and their hateful policies. Epic Universe looks cool, but not cool enough to have to suffer those pathetic goons. So until Florida returns to reality and abates the hate, it's not going to get my business, full stop.
Not all that surprised by Florida. While the political stuff is absolutely a contributing factor and the weather might be causing some to reconsider, I think a biggest culprit is that they had inflated numbers from the first half of 2021 to the first half of 2023 due to all the "revenge travel" going on, and with a combination of high prices and a lack of anything new, people aren't seeing a need for another visit quite yet. I personally canceled my Florida plans in 2023 for a Japan trip as the costs were pretty comparable and the latter sounded far more appealing after doing Florida trips for three years in a row. I'm sure a lot of people will be returning in 2025/2026 once Epic Universe is open regardless of Florida's other issues, and expect both WDW and UOR to post some record numbers again at that time.
As for Disneyland, that's the conundrum of doing business in California right now. The only way to increase profit is to increase revenue faster than costs increase, and the resort is at a point where that's going to be very difficult to do without additional guest capacity. Hopefully Disneyland Forward gets approved and is able to be built fairly quickly (at least by Disney standards), or the resort could run into profitability issues.
I think AJ is right on the money. A combination of "revenge travel" in 2021/22 (and early 2023) along with a lack of new offerings in 2023 (and 2024) will make it seem like the domestic parks aren't cutting the mustard. However, I think if you look more long term at the trends (extending from 2018/2019 until present), and aggregate gains over that 5 year period, you'll see a solid increase in revenue, attendance, and overall demand that would be comparable to other 5-year periods that showed significant growth.
While we could be seeing a lull over this 18-24 month period leading up to Epic Universe, I think when 2025 comes, the domestic parks will be once against leading the charge for growth (both Universal and Disney). However, I do feel like there has been some miscalculation by both major chains in not having plans in motion to fill this gap. It's almost like both resorts are taking a deep breath and gathering stamina for what will be a big push in 2025 and beyond. I worry that the momentum that was built during the post-pandemic period may be lost, and instead of a slow, controlled build, we're getting this slump and then an attempted restart leveraging the opening of Epic Universe. While I think everything will eventually work out, both resorts are taking a risk by taking this pause and hoping that the country's first major new theme park in over a decade will reignite the enthusiasm for the Orlando market.
Russell: "While we could be seeing a lull over this 18-24 month period leading up to Epic Universe, I think when 2025 comes, the domestic parks will be once against leading the charge for growth (both Universal and Disney)".
Me: I wish I had your confidence. My ear is solidly to the ground in Central Florida and there are no plans to begin construction on any major, E-tickets any time soon. Pandora broke ground in January 2014. It opened 3-1/2 years later. At that production rate if construction started TODAY on a similar project it wouldn't welcome guests until the summer of 2027.
But construction hasn't started today.
And while some may claim that Universal builds projects much faster than Disney, and we spot them a year over Disney, it still means the project would not open until summer of 2026.
But (again) construction hasn't started.
Disney really, really, really has to commit to something FAT at D23 in August.
@TH - I'm generally optimistic because Iger has indicated a pretty sizeable investment into Parks and Experiences. I also think Universal will understand the need to tweak and make spot improvements to Epic Universe in addition to needed improvements to the current parks. Do I think that will result in multiple e-ticket attractions in 2025 and 2026, I highly doubt it, because as you noted if those were in the pipeline, it would have been announced or at least on the radar of rumor sites by now. However, I could definitely see the wheels starting to turn over the course of this year, and as you note, D23 in August would be an appropriate time to make formal announcements for attraction additions in 2026 and possibly beyond.
Frankly, I think Disney is being smart by not spending any major capital on additions in to debut in 2025, because they can piggyback on the excitement for Epic Universe and all the additional traffic that it will generate. However, Disney probably needs to start working now if they want to add new attractions in 2026 when the newness of Epic Universe starts wearing off, and Universal probably needs to do the same with an eye towards 2026 at the existing parks and 2027 for additions to EU.
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Disney stock price jumped from 99.14 at the close to 106.02 after hours!