Disney Stock Dips As Theme Park Comments Rattle Market; CFO Cites “Global Moderation From Peak Post-Covid Travel”
07.05.2024 - 15:55
/ deadline.com
Fireworks at Disney’s first-quarter earnings amid a bitter proxy fight quieted down in the second and the company’s commentary on a call today, especially around the parks business, generated some investor angst and knocked the stock lower.
Disney shares are down nearly 10% late morning at about $105.
Parks, as has been the pattern, was outstanding for the three months ended in March with revenue up 10% and operating income up 12%. But the future may not be as clear.
The uptick was driven by international led by Hong Kong Disneyland. Walt Disney World and the cruise line were solid. But Disneyland, despite growing attendance and per capita spend, saw results dip year-on-year on higher costs, including labor, said CFO Hugh Johnston on an earnings call with analysts.
A big surprise — he said Parks growth in the current fiscal third quarter will be flat for a few reasons including “some normalization of post-Covid demand as it relates to demand. While consumers continue to travel in record numbers and we are still seeing healthy demand, we are seeing some evidence of a global moderation from peak post-Covid travel.” Wall Street didn’t quite know what to do with that.
He expects Parks to rebound in the fiscal fourth quarter.
Asked during a Q&A to expand, he said: “In terms of attendance, what we’re basically communicating is, relative to the post-Covid highs, things are tending to normalize. The parks business did 10% growth in the quarter. And obviously, that’s an extremely high revenue number. We still see the bookings as we look ahead indicate healthy growth in the business. So we still certainly feel good about the opportunities for continued strong growth.” He said the Q3 number would be up in the high single-digits
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