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
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eggFeb 08, 2018

Classic

twebber55Feb 08, 2018

dude you re taking this stuff way too serious

eggFeb 08, 2018

Don't worry, I saw your point coming from a mile away, but don't get it at all. DAK's attendance in 2016 was just about the highest, if not the highest, it's ever been. So saying the park had record attendance in 2017 tells us zilch. Just means it's at least slightly higher than before. If you think it's much high, then it's even more odd the Pandora wasn't mentioned once in the last report, so I'm not sure how the post doesn't age well. Anyway carry on.

twebber55Feb 08, 2018

i wouldnt think you would have to explain the joke....

twebber55Feb 08, 2018

ha ha god one egg

RteetzFeb 08, 2018

I think he is saying that because in yesterday's earnings they said Pandora brought record attendance to AK.

eggFeb 08, 2018

Why? It wasn't found anywhere in the document.

twebber55Feb 07, 2018

this post did not age well

brb1006Feb 07, 2018

Since Mickey's 90th birthday, I'm not sure many people heard about this story. But back in 1988, during Mickey's 60th Birthday that year. Roy E. Disney and other Disney executives took a Trip to Moscow. Where they seen this touching short by Russian animators Mikhail Tumelya and Alexander Petrov. Here's what Roy said about this. "Really, quite literally, we all wound up hugging each other with tears coming down our faces... it was one of the more emotional moments that I can remember in my life." Such was Roy Disney's reaction when he and a group of Disney executives first saw the short. I learned about this short from this blog. http://disneybooks.blogspot.com/2006/08/marathon-1989-this-is-probably-most.html

RSoxNo1Nov 18, 2017

Somewhat odd that the word Pandora cannot be found anywhere in this document.

IanDLBZFNov 18, 2017

First off, this was a Holiday (Veteran's Day) so of course it will be packed. I was there between Noon and 1 PM a did BTMRR and POTC with a FP, Future World over at Epcot didn't seem to busy, but World Showcase was slammed. HWS and AK crowds felt more manageable that day.

ford91exploderNov 17, 2017

The overcrowding in the park at night is another reason, I stopped visiting at night because crowds that dense are DANGEROUS, just imagine the result if some kid lit off a string of fireworks. But hey 20 minutes in a cattle chute is the very DEFINITION of a premium experience at Disney these days.

SonconatoNov 16, 2017

You certainly get the feeling he is sucking every penny out of Disney. Last Saturday night, MK was open until midnight with Extra Magic Hours until 2 AM. It was the day between two Christmas parties. We were leaving out from Tomorrowland Terrace during the fireworks to get to the bypass to the front of the park, and there were no employees to direct anyone. It bottle-necked and we were stuck there for 20 minutes with people pushing, shoving, and swearing. Worst of all, there was no way to see the fireworks, which made people angry. I went around and asked three different employees to help the situation before it got violent. None of them could come over because they were overworked each doing something else entirely. I immediately went to Guest Services, where there was a long line of people upset like I was, and I complained to them. The woman behind me was doing the same thing for the same reason. Unfortunately, I'm sure neither of us matter enough to change Disney's strategy so this does not happen again.

ford91exploderNov 16, 2017

Disney has always been its best as a company and financially when a strong Business / Creative team is at the helm where both understand that their roles are compliementary and both are necessary to the success of the enterprise.