Disney U.S. Theme Parks See Post-Covid Bounce Falter As Growth Slows, Profit Dips
Disney’s giant theme park division was first out of the gate in a post-pandemic recovery, showing giant jumps in revenue and profit due to pent-up demand. But the engine is sputtering.
Walt Disney World saw operating income dip in the June quarter. Domestic Parks & Experiences saw profits fall 13% to $1.4 billion, and revenue firm 4% to $5.6 billion.
Disneyland profit was up “modestly,” the company said in its latest earnings report.
The company cited its higher costs, due to inflation and the planned closure of Star Wars: Galactic Starcruiser, as well as a dip in attendance at Walt Disney World. At Disneyland, higher attendance and guest spending – via higher ticket prices – were offset by increased costs driven by inflation.
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Luckily, international parks took up some slack. Shanghai and Hong Kong led international, with the former open for the entire three months versus only three days in the prior-year quarter due to Covid, which lingered much longer in China.
Hong Kong Disneyland saw spending growth and higher volumes, partly offset by higher costs, Disney said. The park was open for 72 days this year compared with 54 days in 2022.
As a result, international parks swung to an operating profit of $428 million from a loss of $64 million as revenue surged 94% to $1.5 billion.
Total Parks, Experiences and Products (includes consumer products and cruise lines) saw revenues for the quarter rise 13% to $8.3 billion and income up 11% to $2.4 billion.
Disney CEO Bob Iger said on a conference call after earnings that parks have had an epic streak and “will continue to be engine for growth, even as we navigate the cycles that come with operating this business.” He cited data showing softness in several major tourism markets in Florida — where Disney is also in a legal battle with Gov. Ron DeSantis.
Interim CFO Kevin Lansberry said the company expects to see demand continuing to moderate at domestic parks in the current fiscal fourth quarter. A wave of consumers wanting to hit the parks after Covid lockdowns has started to burn-out, and comparisons are also tough attendance-wise from the 50th anniversary celebration of Walt Disney World last year. High inflation is hitting Disney’s wallet, as well as its guests.
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