Disney has released its Q2 earnings report, showing a significant increase in revenue, largely driven by the performance of its Parks, Experiences, and Products segment. The report, which covers the period from January 1st to March 31st, 2023, reveals a 25% increase in revenue to $20.5 billion, surpassing analysts’ expectations. We’ll take a look at the breakdowns of the financial report. Here’s a preview of what’s ahead:
- Revenues for the quarter grew 13%.
- Diluted earnings per share (EPS) from continuing operations for the quarter increased to $0.69 from $0.26 in the prior-year quarter.
- Excluding certain items(1), diluted EPS for the quarter decreased to $0.93 from $1.08 in the prior-year quarter.
- EPS from continuing operations for the six months ended April 1, 2023 increased to $1.39 from $0.89 in the prior-year period.
“We’re pleased with our accomplishments this quarter, including the improved financial performance of our streaming business, which reflect the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “From movies to television, to sports, news, and our theme parks, we continue to deliver for consumers, while establishing a more efficient, coordinated, and streamlined approach to our operations.”
Disney Parks, Experiences & Products Growth
The strong performance of the Parks segment can be attributed to the strong performance of Disney Cruise Line, as well as increased attendance and spending by guests in the parks. Disney’s domestic theme parks in particular saw a significant increase in attendance (even with revenue decreases at Walt Disney World and increases at Disneyland) during the most recent quarter, with the company citing the success of new attractions and experiences as contributing factors.
The Parks, Experiences, and Products segment of Disney saw a 35% increase in revenue to $7.4 billion compared to the same period last year. This growth was largely driven by the continued reopening of Disney’s theme parks and resorts worldwide, as well as increased attendance and spending by guests.
International parks were particularly strong, nearly doubling their profit.
Mixed Results for Disney’s Domestic Parks
While the overall performance of the Parks, Experiences, and Products segment was impressive, results at Disney’s domestic parks and resorts were slightly unfavorable compared to the prior year’s quarter. There was a decrease at Walt Disney World Resort, largely offset by growth at Disneyland Resort.
Higher costs, driven by cost inflation, increased expenses associated with new guest offerings, and higher depreciation, were the primary cause of the decline at Walt Disney World Resort. However, increased volumes, driven by attendance growth and higher occupied room nights, partially offset the decline.
At Disneyland Resort, increased operating income resulted from growth in attendance and guest spending, primarily due to increases in average ticket prices and average daily hotel room rates. However, higher costs associated with new guest offerings offset these gains.
Average spending per guest increased by 12% during the quarter.
Bob Iger did call Florida out for retaliating against Disney and singling Disney out. While Governor DeSantis has incorrectly said that only Disney has its own legislative district, Florida actually has approximately 2,000 special districts. Disney has filed a federal lawsuit against the state.
Iger further said that the company plans to spend $17 billion in the state in the coming years. The company employs 75,000 people in Florida and draws millions of visitors to the state. Iger asserted that the decision is Florida’s on whether they want Disney to continue investing in the state or not.
Disney Cruise Line Results
The report highlights the impressive performance of Disney Cruise Line, which saw an increase in passenger cruise days, including the addition of the Disney Wish, which launched in the prior year’s fourth quarter. However, higher costs associated with the ongoing fleet expansion partially offset these gains.
Disney+ and Media Networks
Disney+ saw its second consecutive quarterly drop in subscribers, losing 4 million subscribers in the first three months of 2023. This followed its first-ever decline at the end of 2022. However, the company also managed to narrow its streaming business losses by $400 million, down 26% year over year. The second sub drop was mainly driven by a 4.6 million decline at Disney+ Hotstar, the version of the service offered in India and parts of Southeast Asia, after the company lost streaming rights to Indian Premier League (IPL) cricket matches.
The company ended the quarter with 157.8 million subscribers, significantly missing Wall Street’s estimate of 163.17 million subscribers. Hulu gained 200,000 in the quarter, and ESPN+ increased by 400,000.
Bob Iger confirms that plans are underway to merge Disney+ and HULU into a single app experience later this year. CFO Christine McCarthy also announced that the company is in the process of reviewing the content on its streaming services to focus on the kinds of content that customers really want and that grows subscribers.
THE BASICS
Overall, Disney’s Q2 earnings report shows strong performance despite ongoing challenges related to Disney+. The Parks, Experiences, and Products segment was a standout performer, demonstrating the resilience of Disney’s Parks, cruise ships, and consumer products. However, the company continues to face challenges related to cost inflation and the cost of streaming content and marketing.
RELATED NEWS: WDW Guest Experience Changes
BREAKING! Walt Disney World Reveals MAJOR Guest Experience Changes for 2024
You must be logged in to post a comment.