The Walt Disney Company’s third fiscal quarter earnings call is live today. We’ll have live updates here, as well as coverage via Valliant Renegade on YouTube:
Live Updates:
8:34 AM (all times Eastern)
DISNEY BEGINS WITH QUESTIONS FIRST: MAJOR CHANGE IN TWDC FORMAT
8:35 AM
IGER ASKED ABOUT THEME PARK LOWER DEMAND PROJECTED FOR QUARTERS INTO THE FUTURE
8:37 AM
DISNEY PROJECTS FLAT DEMAND FOR GLOBAL DISNEY PARKS AND EXPERIENCES AND CLAIMS ENTERTAINMENT WILL OFFSET DISNEY’S BIGGEST REVENUE / PROFIT DRIVER
8:38 AM
TWDC HOPES FOR GREATER ADVERTISING POTENTIAL ON ESPN TO COMPENSATE FOR HUGE NBA DEAL: ACKNOWLEDGES IT WILL NOT BE PROFITABLE IN FIRST YEARS
8:40 AM
IGER CLAIMS STREAMING SUCCESS IS BEING DRIVEN BY CREATIVITY: USES INDUSTRY AWARDS AS EXAMPLES
8:41 AM
IGER CONFIRMS CHANNEL(S) COMING FOR DISNEY PLUS — MAY BE FIRST TIME REFERENCING PLURAL CHANNELS BEYOND THE ABC NEWS ALREADY DECLARED OFFICIALLY BY THE COMPANY
8:43 AM
BOB IGER SAYS THAT THE COMPANY IS “BULLISH” ON GLOBAL STREAMING VALUE | INSERTS BOX OFFICE TO JUSTIFY INVESTMENTS IN STREAMING
8:46 AM
CEO BOB IGER CONTINUES TO REFER TO INDUSTRY AWARDS IN AN INDUSTRY THAT OFTEN IS HEAVILY INFLUENCED BY DISNEY — AVOIDS FINANCIAL DEFENSE OF ENTERTAINMENT
8:47 AM
DISNEY CFO JOHNSON CLAIMS PASSWORD SHARING CRACKDOWNS WILL DRIVE GROWTH OF DISNEY PLUS AND STREAMING TOWARDS DOUBLE DIGIT MARGINS
8:48 AM
BOB IGER DOES NOT ANNOUNCE ANY NEW STRATEGIC PARTNERS FOR ESPN
8:50 AM
DISNEY REFUSES TO DISCUSS ATTENDANCE AT DISNEY PARKS: CLAIMS LOWER INCOME GUESTS FEEL STRESS AND HIGH INCOME GUESTS ARE CHOOSING TO TRAVEL INTERNATIONALLY INSTEAD
8:51 AM
CFO JOHNSON DOES NOT SAY DOMESTIC PARK ATTENDANCE WILL REBOUND — CLAIMS INTERNATIONAL MAY BECAUSE OF “THE OLYMPICS” — NO EXPLANATION OF HOW IN THE WORLD THE OLYMPICS HURTS ATTENDANCE
8:53 AM
DISNEY SAYS AD REVENUES INCREASED 8%, ADS ON DTC INCREASED BY 20% | CONSUMER PRODUCTS AND SERVICES / TECH DOING WELL ACCORDING TO CFO
8:55 AM
DISNEY REITERATES THEY WILL NOT LICENSE CORE IP FOR ENTERTAINMENT
8:58 AM
DISNEY PROVIDES NO FLAVOR STATEMENTS REGARDING THE RELEASE FOR THE DAY — COMPLETELY AVOIDS NORMAL STRUCTURE OF TWDC EARNINGS CALLS
Thoughts on the importance of Disney Parks and why this Disney call might have been so damaging for the company today:
Disney Parks and Experiences have historically been one of the most significant revenue streams for the company. For instance, in the fiscal year 2022, this segment generated approximately $28.7 billion in revenue, accounting for about 35% of Disney’s total revenue. This robust performance underscores the parks’ critical role in the company’s overall financial architecture. We believe the percentage has actually increased in the last two years.
The profitability of Disney Parks is equally noteworthy. The segment’s operating income often surpasses that of other divisions, thanks to high margins driven by ticket sales, merchandise, food and beverage, and lodging. In fiscal 2022, the operating income for Disney Parks, Experiences, and Products was around $7.4 billion, reflecting a recovery from the pandemic-induced downturn and highlighting the segment’s resilience and profitability.
The importance of Disney Parks extends beyond immediate revenue and profitability; it also provides the company with a diversified revenue base that mitigates risks associated with cyclical downturns in other sectors, such as media and entertainment. During the COVID-19 pandemic, the temporary closure of parks was a significant financial strain, yet the rapid recovery post-reopening demonstrated the pent-up demand and the parks’ integral role in Disney’s financial ecosystem.
Moreover, the parks’ performance often acts as a barometer for broader economic health. High visitor numbers and spending levels signal consumer confidence and discretionary spending capacity, both crucial indicators for investors. The parks’ ability to rebound quickly from economic shocks provides a stabilizing force for Disney’s overall financial health.
The symbiotic relationship between Disney Parks and the company’s other divisions cannot be overstated. The parks serve as a living showcase for Disney’s intellectual properties (IPs), enhancing brand value and driving cross-segment revenue. For example, the integration of franchises like Star Wars and Marvel into park attractions creates immersive experiences that boost ticket sales and merchandise revenue. Simultaneously, these attractions promote Disney films and series, driving viewership and subscription growth for Disney+ and other streaming services.
With Disney declaring today that there is “demand moderation” (ie lower attendance) and not guiding away from that in future quarters, you can understand why investors might be worried.
Final Update:
As a result, Disney stock opened more than 3% down within ten minutes of US markets opening.
