Walt Disney Company reports Q3 2023 earnings with income falling at Walt Disney World

Aug 09, 2023 in "The Walt Disney Company"

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Walt Disney Company headquarters in Burbank, California

Posted: Wednesday August 9, 2023 4:!0pm ET by WDWMAGIC Staff

The Walt Disney Company today reported earnings for its third quarter and nine months ended July 1, 2023.

Disney Parks, Experiences and Products revenues for the quarter increased 13% to $8.3 billion, and segment operating income increased 11% to $2.4 billion.

The domestic parks and Disney Vacation Club saw a decrease in operating income, partially offset from increased revenue at Disney Cruise Line. Walt Disney World Resort's income decreased due lower attendance and higher costs, including those related to inflation and the planned closure of Star Wars: Galactic Starcruiser. Disneyland Resort, saw a modest increase in results, but this was largely offset by higher costs and inflation, despite increased attendance and guest spending, driven by higher average ticket prices.

“Our results this quarter are reflective of what we’ve accomplished through the unprecedented transformation we’re undertaking at Disney to restructure the company, improve efficiencies, and restore creativity to the center of our business,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “In the eight months since my return, these important changes are creating a more cost- effective, coordinated, and streamlined approach to our operations that has put us on track to exceed our initial goal of $5.5 billion in savings as well as improved our direct-to-consumer operating income by roughly $1 billion in just three quarters. While there is still more to do, I’m incredibly confident in Disney’s long-term trajectory because of the work we’ve done, the team we now have in place, and because of Disney’s core foundation of creative excellence and popular brands and franchises.”

View the full Q3 2023 earnings report, and see below for the parks segment report.

Disney Parks, Experiences and Products
Disney Parks, Experiences and Products revenues for the quarter increased 13% to $8.3 billion, and segment operating income increased 11% to $2.4 billion. Higher operating results for the quarter reflected increases at our international parks and resorts, partially offset by lower results at our domestic operations and, to a lesser extent, our merchandise licensing business.
Higher operating results at our international parks and resorts were due to growth at Shanghai Disney Resort and, to a lesser extent, Hong Kong Disneyland Resort. The increase at Shanghai Disney Resort was due to the park being open for all of the current quarter compared to 3 days in the prior-year quarter as a result of COVID-19 related closures. Higher operating results at Hong Kong Disneyland Resort were due to guest spending growth and higher volumes, partially offset by increased costs driven by inflation. Guest spending growth was primarily due to an increase in average ticket prices. Higher volumes were attributable to increases in attendance and occupied room nights. Results at Hong Kong Disneyland Resort reflected the park being open for 72 days in the current quarter compared to 54 days in the prior-year quarter due to COVID-19 related closures.
The decrease in operating income at our domestic operations was due to lower results at our domestic parks and Disney Vacation Club, driven by lower unit sales, partially offset by an increase at Disney Cruise Line.
Lower operating income at our domestic parks and resorts was attributable to a decrease at Walt Disney World Resort, while results at Disneyland Resort were up modestly compared to the prior-year quarter. The decrease at Walt Disney World Resort was primarily due to higher costs and lower volumes. The increase in costs was attributable to inflation and accelerated depreciation related to the planned closure of Star Wars: Galactic Starcruiser. Lower volumes were due to decreases in occupied room nights and attendance. At Disneyland Resort, higher attendance and increased guest spending were largely offset by higher costs driven by inflation. Guest spending growth was primarily due to an increase in average ticket prices.
Growth at Disney Cruise Line was due to an increase in passenger cruise days, partially offset by higher costs associated with our ongoing fleet expansion and increased depreciation.
The decrease at our merchandise licensing business was due to lower revenue from merchandise based on Star Wars, Toy Story and Avengers.

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HauntedPirateAug 14, 2023

You mean everything that was created before he was installed plus everything that he bought? Yeah, I feel bad for the guy, with such limited content and resources at his disposal…

tancAug 14, 2023

$250 million that could have gone else where instead of some niche expensive "spaceship". I get the starcruiser was a one of a kind experience or whatever, but it was destined to fail to me if the price was never meant to go below $6k for 2 days. It also was a terrible idea for them to open it relatively early during the ongoing pandemic. Overall, it's sad because this will be a long lost experience.

Disstevefan1Aug 14, 2023

Keeping the stock above 85 is a total success for Bob! We have to remember what he has to work with!

HauntedPirateAug 14, 2023

DIS at close on Aug 9 - $87.52/share DIS after the latest earnings report - $92.38/share (peak) DIS right now - $88.50/share I guess Bob didn't say or announce anything that really moved the needle.

Nubs70Aug 13, 2023

17,510,000

flynnibusAug 13, 2023

No - because investing is about what your goal is. Not necessarily about a company’s health. Investors are more concerned about return in the style they are seeking . A return that could either be short or long term… high or low volatility. An investor is building a portfolio that looks to perform in a profile they can predict. A company can be entirely healthy and strong… but not doing what investors are seeking. This is why the management of the company profile with the market by the ceo and cfo is so critical…. And how the company leverages its own stock. If you are heavily dependent on your stock valuation to push things like compensation and acquisitions you are locking yourself into a model where you paint yourself as a stock that must climb or you can go off ghe rails… even if your core business isn’t faulty. Regulation plays a huge role in all this too… when the walls go up, new strategies emerge and they create their own new sets of risks and consequences. (Options, taxes, buybacks,etc). The way the market is regulated and how people look to make money has radically changed how businesses function over the last 50 plus years. Health and ‘what the market wants’ are not really the same thing. They are related… but the former can often be overlooked for other potentials depending on what an investor is after. Example: Companies that look to be disruptive or speculative to create lock out conditions are often more focused on speed and building critical mass… more than touting solid fiscal health day to day. They promise that will come later once the critical points are reached.

JoeCamelAug 13, 2023

Isn't all that what you use to decide to buy sell or hold a stock if you are a. Institutional investor? If they don't see the value to support it they go elsewhere and the price declines to a point where the worth matches the value and they buy again?

flynnibusAug 11, 2023

Cash flow… profit margins…. Assets verse liabilities. Forecast for potential marketability. All the things that actually let a company function independently of reying on a stock valuation to function because they are leveraging their own futureself to operate. The key world here is HEALTH- the ability to operate with a going concern.

Slpy3270Aug 11, 2023

Toldya!

TalkingHeadAug 11, 2023

How many subs paying $19.99 a month does it take to compensate for the lost theatrical business of the $250-350m features? Iger is delusional if he thinks the company in its current makeup is capable of replicating Avatar’s success. The only chance they have of that is Avatar 3, another production that Disney is essentially releasing and not producing. Importantly Cameron isn’t spinning off Avatar series that D+ can lay claim to. That franchise is just the theatrical features, which isn’t what Disney’s current model is about at all.