The re-opening of a park gives a short-term lift to results, but it will need growth across the division.
Shanghai was a key driver to the Walt Disney’s theme park division’s strong growth in the third quarter, executives said in an earnings call Wednesday. The park’s drop of Covid restrictions and closures gave its income a boost. In last year’s third quarter, it was open for only 3 days due to Covid restrictions – this year, for the full three months.
Hong Kong Disneyland also gave a boost due to higher guest spending growth and higher volume. The performance of Disney’s Asia parks reinforce a “clear opportunity for growth,” said CEO Bob Iger.
“International parks continued its strong growth trend with year-over-year operating income increasing at all our international sites, but most significantly at Shanghai Disney, which saw record highs from a revenue, operating income and margin perspective,” said Kevin Lansberry, Interim Chief Financial Officer.
The international division overall helped Disney’s theme parks division increase its revenue 13% to $8.3 billion. Segment operating income rose 11% to $2.4 billion.
Overall, Parks and Experience has had an “impressive streak” and will continue to be a “key growth engine” for the company, said Iger.
Here’s what else you need to know about Disney’s third-quarter results:
Domestic park growth returns to normalcy. Domestic theme parks are seeing a softening in performance. This was due in part to the quarter being compared to the park’s performance when Disney’s 50th anniversary took place. In addition, Post-Covid pent-up demand has leveled off in Florida and a strong dollar has tamped down international visitation into the state.
Walt Disney World is still beating pre-pandemic levels. Revenue for the park is 21% higher in revenue and 29% higher in operating income compared to fiscal 2019.
Disney Cruise Line will double its worldwide capacity. The cruise line saw strong revenue and operating income growth this past quarter .Booked occupancy for the fourth quarter is at 98%. Disney plans to add two more ships in fiscal year 2025 and another in fiscal year 2026.
Disney’s board in July extended Iger’s contract by two years, to the end of 2026.
In Wednesday’s earnings call, Iger said the company has made cost-cutting progress since he announced in February plans to shed 7,000 jobs and cut costs by $5.5 billion. “We aggressively reduced costs across the enterprise, and we’re on track to exceed our initial goal of $5.5 billion in savings,” said Iger.
Amid the reorganization, Disney Parks, Experiences, and Products Chairman Josh D’Amaro kept his position amid the reorganization. At Skift Global Forum last year, D’Amaro said his ambition is to develop more immersive storytelling parks and attractions.
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