Disney parks posted record quarterly revenue of nearly $10 billion for its experiences division during the fiscal third quarter, the company reported Wednesday, marking a 10% increase from the same quarter a year prior. The experiences segment—which includes theme parks, cruise line, resorts and consumer products—achieved its sixth consecutive quarter of record revenue, with operating income exceeding $3 billion, up 20% year-over-year. The strong performance comes despite a 6% decline in international travel to the United States and reported attendance lags at competitor parks, driven by Disney's Cool Kids Summer promotion targeting young families and the addition of two new cruise ships that increased stateroom capacity by approximately 50%.
Disney Experiences Division Reports Record Fiscal Q3 Revenue
The experiences division recorded operating income of more than $3 billion during the fiscal third quarter, representing a 20% increase from the same period a year prior. Disney shares rose 2% Wednesday following the earnings announcement.
"It's important, I think, to highlight that we're performing significantly better than our competition," Disney CEO Josh D'Amaro said during Wednesday's earnings call. "And in doing that, delivering strong volume and per [capita] spending results. And to remind everyone we're achieving this even during a period where there's a fair amount of macro uncertainty."
CFO Hugh Johnston reported domestic park attendance increased 3% while guest spending rose 4% during the quarter.
Walt Disney World Attendance Outperforms Orlando Market Competitors
Disney reported "very strong attendance" at Walt Disney World in Orlando, according to CFO Hugh Johnston, contrasting with competitor performance in the same market. Last month, rival Comcast reported lags in theme park attendance, particularly in Orlando, Florida.
"Those numbers are somewhat different than what you would have seen from our competitor down there, as well as some of the reported traffic coming through Orlando [International] Airport," Johnston told CNBC.
The World Travel & Tourism Council found that while tourism grew worldwide last year, the United States was the only major destination to see a drop in foreign visitors. Overall, international travel to the U.S. fell 6%, the organization reported. Travel bans, visa fees, invasive searches at ports of entry, trade frictions, geopolitical unease and safety concerns contributed to the decline, according to WTTC and travel experts.
Cool Kids Summer Promotion Drives Domestic Park Visits
Disney attributed strong attendance to its Cool Kids Summer promotion, which features kid-focused character meet-and-greets, dance parties and air-conditioned hangout spots as well as free water park admission for hotel guests. The company also refreshed park attractions including Buzz Lightyear's Space Ranger Spin, Big Thunder Mountain Railroad and the Muppets-themed Rock 'n' Roller Coaster.
"Disney activated their fans to visit the theme parks during the quarter using a mix of marketing and discounting campaigns targeting young families and residents," said Gavin Doyle, founder of MickeyVisit.com. "Despite a massive slate of upcoming rides that might have encouraged guests to delay their visits, Disney has found ways to create urgency and enticing opportunities to visit the theme parks now."
At Disneyland in Anaheim, California, the company ran targeted discounts for California residents and kids. "Disneyland's targeted discounts for California residents and kids ensured that families did not skip visiting the parks this year," Doyle said.
Disney Cruise Fleet Expansion Increases Capacity 50%
Disney's experiences segment benefitted from the addition of two new ships to its cruise fleet, the Disney Destiny and the Disney Adventure. Together these cruise liners increased stateroom capacity by around 50% and helped push revenue from the resorts and vacations piece of the division up 17% to $2.77 billion for the fiscal third quarter.
FAQ
What revenue did Disney's experiences division report for the fiscal third quarter?
Disney's experiences division reported nearly $10 billion in revenue for the fiscal third quarter, representing a 10% increase from the same quarter a year prior and marking a quarterly record. The division recorded operating income of more than $3 billion, up 20% year-over-year.
How did Disney's Orlando parks perform compared to competitors during the quarter?
Disney reported "very strong attendance" at Walt Disney World in Orlando with domestic park attendance up 3% and guest spending rising 4%, according to CFO Hugh Johnston. This contrasted with competitor Comcast, which reported lags in theme park attendance in Orlando during the same period.
What promotional strategies contributed to Disney's strong park attendance?
Disney implemented its Cool Kids Summer promotion featuring kid-focused character meet-and-greets, dance parties, air-conditioned hangout spots and free water park admission for hotel guests. The company also offered targeted discounts for California residents and kids at Disneyland in Anaheim, alongside refreshed attractions including Buzz Lightyear's Space Ranger Spin and Big Thunder Mountain Railroad.
