Walt Disney parks hold up well, during flat year
Despite impact of hurricane damage, parks were among better performers
Walt Disney has reported earnings for its fourth quarter and fiscal year ended 30th September, 2017, with revenues from parks and resorts increasing by six per cent.
Revenues in the quarter were down from $13.1bn in the previous corresponding period to $12.7bn, a change of three per cent. Full year total revenue was down from $55.6bn to $55.1bn – a change of one per cent. Net income for the fourth quarter was down slightly from $1.77bn to $1.74bn and for the full year down four per cent from $9.3bn to $8.9bn.
“No other entertainment company is better equipped to navigate the ever-evolving media landscape, thanks to our unparalleled collection of brands and franchises and our ability to leverage IP across our entire company”
“No other entertainment company is better equipped to navigate the ever-evolving media landscape, thanks to our unparalleled collection of brands and franchises and our ability to leverage IP across our entire company,” said Robert A. Iger, chairman and CEO , The Walt Disney Company. “We look forward to launching our first direct-to-consumer streaming service in the new year, and we will continue to invest for the future and take the smart risks required to deliver shareholder value.”
Parks and Resorts revenues for the quarter fared rather better, increasing six per cent to $4.7 billion, and segment operating income increased seven per cent to $746 million. Operating income growth for the quarter was due to an increase at international operations, partially offset by a decrease in domestic operations, which were unfavourably impacted by Hurricane Irma. As a result of the hurricane, Walt Disney World Resort was closed for two days.
Results at the firm’s international operations were due to growth at Disneyland Paris and Shanghai Disney Resort. The improvement at Disneyland Paris reflected increases in attendance, guest spending and occupied room nights, partially offset by higher costs, driven by the 25th Anniversary celebration, and a loss from its 50 per cent joint venture interest in Villages Nature. Guest spending growth was primarily due to higher average ticket prices and food and beverage spending. The increase at Shanghai Disney Resort was due to attendance growth and lower marketing costs, partially offset by lower average ticket prices. The decrease in marketing costs reflected costs associated with the grand opening of Shanghai Disney Resort in the prior year.
The decrease in operating income in domestic operations was driven by lower results at Walt Disney World Resort, partially offset by an increase in its cruise line business, growth at Disneyland Resort and higher sales of vacation club units.
Lower results at Walt Disney World Resort were driven by higher costs and fewer occupied room nights, partially offset by growth in guest spending and attendance, although both were negatively impacted by Hurricane Irma. Higher costs were primarily due to increases in labour and employee benefits, depreciation and marketing. Guest spending growth was due to increased food and beverage spending and higher average daily hotel room rates. Available hotel room nights were lower due to refurbishments and conversions to vacation club units.