Q4 Earnings Report shows lower results at Walt Disney World and Hurricane Irma cost Disney $100 million

Nov 10, 2017 in "The Walt Disney Company"

Disney filed its Q4 FY2017 earnings report yesterday, and as expected, Hurricane Irma hit Disney hard.

Disney said that due to park closures and cruise line cancellations, the cost of Hurricane Irma was $100 million, and represented a 3% decline in US attendance.

Overall, profits for the financial year fell 4% to $8.98bn - the first drop in annual profits since 2009.

At the parks, 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. Higher costs were primarily due to increases in labor 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.

You can view the full report here, and below is the Parks and Resort section.

Parks and Resorts

Parks and Resorts revenues for the quarter increased 6% to $4.7 billion, and segment operating income increased 7% to $746 million. Operating income growth for the quarter was due to an increase at our international operations, partially offset by a decrease at our domestic operations, which were unfavorably impacted by Hurricane Irma. As a result of the hurricane, Walt Disney World Resort was closed for two days, and we canceled three cruise itineraries and shortened two others.

Results at our 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% 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 at our domestic operations was driven by lower results at Walt Disney World Resort, partially offset by an increase at our cruise line, 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 labor 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.

Growth at our cruise line resulted from higher average ticket prices.

Higher results at Disneyland Resort were due to increases in guest spending and attendance, partially offset by higher costs for new guest offerings and marketing. The increase in guest spending was primarily due to higher average ticket prices.

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Article Posted: Nov 10, 2017 / 11:34am EDT