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Disney’s chief financial officer has said that the company feels ‘very, very good’ about its planned US$60bn investment into its parks following weaker-than-expected third-quarter results for the Experiences division
Tom Anstey | Planet Attractions | 08 Aug 2024
Disney saw operating profit at its parks decline in the most recent quarter
Disney has reported weaker-than-expected third-quarter results for its theme park division, though its chief financial officer has said that the company feels “very, very good” about the multi-billion dollar investments it is making into visitor experiences.
Still positive, Disney's operating profit for its domestic parks and experiences declined 3% from the previous year to US$2.2bn, while revenues grew 2% to US$8.4bn.
According to Disney, the decrease in operating income came as a result of high costs linked to inflation and a larger drop in consumer demand than expected.
However, the company is confident in its long-term prospects, as shown by its commitment to invest more than US$60bn in its theme parks and cruise businesses.
Speaking during an earnings call, Hugh Johnston, Disney’s senior executive vice president and chief financial officer, said the investments it was making would turbocharge company growth.
“We wouldn't be making capital investments in an accelerated way if we didn't expect to accelerate growth out of those businesses and that's true of the cruise ships as well,” said Johnston. “We're investing because we're looking to accelerate growth and hence the term turbocharge.”
He added: “The investments that we're making into the Experiences business, we feel very, very good about it. It's been a great returning business for a long time.”
Commenting on the quarter’s revenue growth, Johnston said the reason was the company’s strong list of IPs.
“The reason, obviously, is the IP is so strong in our parks,” he said. “It really does attract a strong audience.”
Disney’s chief executive, Bob Iger described the parks decline as “a bit of a slowdown that is being more than offset by the entertainment business”, with films such as the record-setting Inside Out 2 boosting earnings.
It’s been a tough period for US parks. Last month, Comcast’s Brian Roberts blamed ‘difficult comparisons’ for a decline in Universal’s theme park revenue, with the most recent financial results showing a 10.6% decline for the operator during the quarter.
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