With the reopening of Walt Disney theme parks around the world in this past quarter, the company has not surprisingly seen a return to profitability at the Disney Parks, Experience and Products segment.
Disney Parks, Experiences and Products revenues for the quarter increased to $4.3 billion compared to $1.1 billion in the prior-year quarter. Segment operating results increased $2.2 billion to income of $356 million.
"We ended the third quarter in a strong position, and are pleased with the Company's trajectory as we grow our businesses amidst the ongoing challenges of the pandemic," said Bob Chapek, Chief Executive Officer, The Walt Disney Company. "We continue to introduce exciting new experiences at our parks and resorts worldwide, along with new guest-centric services, and our direct-to-consumer business is performing very well, with a total of nearly 174 million subscriptions across Disney+, ESPN+ and Hulu at the end of the quarter, and a host of new content coming to the platforms."
At Walt Disney World third quarter attendance levels were at or near the daily capacity levels which increased throughout the quarter. Currently 70% of Walt Disney World Resort hotels are available for guest stays.
CFO Christine McCarthy said during the earnings call, "Guest spending at the domestic parks has been exceptionally strong with third quarter per capita up significantly versus fiscal 2019 at Walt Disney World and Disneyland. They have benefited from demand and favorable guest mix, driving higher admissions per cap and as well as spending on products related to Star Wars Galaxy's Edge, and Avengers Campus. Looking forward theme park resolutions remain strong. We continue to utilize our yield management strategy to deliver the optimal guest experience and provide flexibility to the guests during the dynamic times. All while driving economic margin for the shareholders."
When asked about how the Delta variant of COVID019 has impacted the parks, Chapek said "In terms of Delta variant, we see strong demand for our parks continuing. The primary noise that we're seeing right now is around group or conference cancellations. Right now we're seeing above the Q3 attendance levels, they were pretty darn good. We're still bullish about our park business going forward. I may suggest that we've implemented a reservation system that's going to enable us to spread our demand, increase the yield, and improve the guest experience at the same time. In terms of the long-lasting impacts that you mentioned, I think some of the cost implications that we need to do for hygienic purposes are going to be relatively short lived. In the grand scheme of operating our parks, not all that material. What will be the long-lasting impact is the improvement that we're making with guest personalization and guest choice affecting the tremendous yield benefits that we've been able to extract over the last few quarters. That's only going to grow in the future with our ability to do world class yield management system through the new reservation management system."
With regard to increasing capacity and staffing, Christine said, "We're expecting the parks to be fully staffed by the end of the calendar year 2021. We're going to be increasing capacities as we have the demand and we're also being able to thoroughly train our employees as they come back in. This is a never-changing landscape with COVID. We're going to be particularly careful and also going to bring our capacity online aggressively and measured. We're not going to just open up the doors and fling them open. We're doing this in the measured fashion for the health and safety of not only our guests, but also our cast members in the parks."
You can view the full earnings report here, and below is the Parks, Experiences and Products statement.
Disney Parks, Experiences and Products
Disney Parks, Experiences and Products revenues for the quarter increased to $4.3 billion compared to $1.1 billion in the prior-year quarter. Segment operating results increased $2.2 billion to income of $356 million. Operating income for the quarter reflected increases at our domestic and international parks and experiences businesses and at merchandise licensing and retail.
Growth at our parks and experiences business was due to the reopening of our parks and resorts. Walt Disney World Resort and Shanghai Disney Resort were open for the entire quarter. In the prior-year quarter, Walt Disney World Resort was closed for the entire quarter and Shanghai Disney Resort was open for 48 days. Hong Kong Disneyland was open for 72 days in the current quarter and 10 days in the prior- year quarter. Disneyland Resort and Disneyland Paris were open for 65 days and 19 days respectively, during the current quarter, whereas these businesses were closed for all of the prior-year quarter. During the periods our parks and resorts were open, they were generally operating at reduced capacities.
Growth in merchandise licensing was primarily due to higher revenue from merchandise based on Mickey and Minnie, Star Wars, including The Mandalorian, Disney Princesses and Spider-Man. The increase at our retail business was due to higher results at Disney Stores, most of which were closed in the prior-year quarter and the comparison to the write-down of store assets in the prior-year quarter.
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