Walt Disney Company reported its quarterly earnings for its second fiscal quarter last week, showing continued gains in the parks and resorts of 15%.
“We’re very pleased with our Q2 results and thrilled with the record-breaking success of Avengers: Endgame, which is now the second-highest grossing film of all time and will stream exclusively on Disney+ starting December 11th,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “The positive response to our direct-to-consumer strategy has been gratifying, and the integration of the businesses we acquired from 21st Century Fox only increases our confidence in our ability to leverage decades of iconic storytelling and the powerful creative engines across the entire company to deliver an extraordinary value proposition to consumers.”
You can read the full report, and see below for the Parks, Experiences and Products segment.
Parks, Experiences and Products revenues for the quarter increased 5% to $6.2 billion and segment operating income increased 15% to $1.5 billion. Operating income growth for the quarter was due to growth at our domestic theme parks and resorts, increases at our consumer products business and cruise line and higher attendance and occupied room nights at Hong Kong Disneyland Resort. Results included an adverse impact from a shift in the timing of the Easter holiday. In the current year, the entire Easter holiday falls in the third quarter, while the second quarter of the prior year included one week of the Easter holiday.
Operating income growth at our domestic theme parks and resorts was due to increased guest spending and higher attendance and occupied room nights at Walt Disney World Resort, partially offset by higher costs. Guest spending growth was primarily due to increases in average ticket prices and food, beverage and merchandise spending. Higher costs were due to labor and other cost inflation and costs for new guest offerings.
The increase at our consumer products business was driven by growth at our games business, partially offset by a decrease at our merchandise licensing business. Operating income growth at our games business was due to the sale of rights to a video game and royalties from the licensed title Kingdom Hearts III, which was released in the current quarter. The decrease at our merchandise licensing business was driven by lower minimum guarantee shortfall recognition due to the adoption of ASC 606 (see page 5), partially offset by a favorable foreign currency impact.
The increase in operating income at our cruise line reflected the impact of the dry-dock of the Disney Magic in the prior-year quarter and higher average ticket prices.
Results at Shanghai Disney Resort were comparable to the prior-year quarter as an increase from higher average ticket prices was largely offset by lower attendance.
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