Revenue was up but income was down at Disney's theme parks in the three month period ending July 1, the company reported this morning.
Disney brought in $5.82 billion at its U.S. theme parks during the period, plus another $1.6 billion from its international parks. That's up 3% and 5%, respectively, compared with the same period one year ago.
Yet higher costs results in a decline in operating income for the U.S. parks, which was down 6%, to $1.347 billion for the quarter. Internationally, operating income was up 2% for the quarter, to $435 million.
Disney's U.S. theme parks include Disneyland and Disney California Adventure in Anaheim, and Magic Kingdom, EPCOT, Disney's Hollywood Studios, and Disney's Animal Kingdom at the Walt Disney World Resort in Florida. Abroad, Disney owns Disneyland Paris and the Walt Disney Studios Park in France, as well as shares of the Hong Kong Disneyland and Shanghai Disneyland parks. The Tokyo Disney Resort parks - Tokyo Disneyland and Tokyo DisneySea - and wholly owned by Oriental Land Co. under license from Disney.
Overall, the Disney Experiences segment - which includes the parks, Disney Cruise Line, and consumer products - reported $8.38 in billion in revenue for the quarter, up 2% from the prior year, and $2.22 billion in operating income, a decline of 3%.
Disney reported higher attendance and occupied room night at its international properties. The company said that attendance at its U.S. parks was comparable to the prior year and that per-capita guest spending was slightly up.
"We expect that the demand moderation we saw in our domestic businesses in Q3 could impact the next few quarters," Senior Executive Vice President and Chief Financial Officer Hugh Johnston said. "While we are actively monitoring attendance and guest spending and aggressively managing our cost base, we expect Q4 Experiences segment operating income to decline by mid single digits versus the prior year, reflecting these underlying dynamics as well as impacts at Disneyland Paris from a reduction in normal consumer travel due to the Olympics, and some cyclical softening in China."
"This weekend, we will gather in Anaheim for D23: The Ultimate Disney Fan Event, where we will showcase more of the many exciting things we have in store from across the company, including upcoming attractions and experiences," CEO Bob Iger said. "No one else but Disney could bring together tens of thousands of fans from around the world for an event like D23, because no one else has such a unique and powerful connection with fans built on 100 years of storytelling excellence and unparalleled innovation."
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"Revenue up, income down"... understandable as I think a lot of us are having the same issue at a smaller scale with our household budgets in the midst of this economy.
No surprises here ... Wondering if (or when) WDW will follow UO's lead and offer deep discounts on tix.
The big non-theme park news in this quarterly report is that streaming made money for Disney for the first time this quarter. That, along with huge box office from Inside Out 2 and Deadpool, takes some pressure off the parks to carry the the company, as they have been doing in the past couple of years.
Cautious optimism...?
Deadpool is probably a ways away from slowing down too. And I believe I read that Inside Out 2 just passed Frozen 2 as the highest-grossing animated film of all time. Taking away the tribalism aspect of Disney v Universal and also looking at things outside of the sphere of theme park optics, I just hope that things are trending towards actual movies in a theater becoming an event again. I realize that it is expensive to see movies in the theater now, but if streaming services would stop handing out prestige films or big budget tentpoles mere weeks after release then I think it would incentivize people to go out and see movies the old-fashioned way.
"The big non-theme park news in this quarterly report is that streaming made money for Disney for the first time this quarter."
Yeah, and what did Disney do? They raised prices again where a non-ad subscription for Disney+ is now double what it cost when the service first launched. All this despite Iger's statements that they're going to slow down how many series and movies are produced for their services (quality over quantity), meaning subscribers are going to be paying more for less. That's almost the polar opposite of the strategy employed by industry leader, Netflix..
Man if I were Comcast CEO Brian Roberts Disney's financial news would make me VERY nervous. First, because lose of park revenues now seems to be an industry trend -- as opposed to which parks have better experiences or IP. Second, because if Comcast goes through with the "must buy a three park pass to get into Epic Universe" thing, the price of the ticket (one day at Epic) may be two or three times the price of a one-day ticket to a WDW park. Of course if they scratch the three-day ticket plan, the existing Comcast parks (USF and IOA) could lose massive numbers of guests to EU.
The industry-wide slump would also make adding new rides to the original Comcast parks incredibly risky.
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"No one else but Disney could bring together tens of thousands of fans from around the world for an event like D23, because no one else has such a unique and powerful connection with fans built on 100 years of storytelling excellence and unparalleled innovation."
Such a true statement, and one I hope Disney takes to heart and to diminish some of the exploitation of that long-built loyalty prevalent in much of the company's recent decision making.