Disney’s Stock Falls with Expectations of a Lackluster Summer
By Movieguide® Contributor
After climbing 29% YTD, Disney’s stock price fell earlier this week when the company revealed that it is expecting its parks business to match last year’s underwhelming performance.
“While consumers continue to travel in record numbers and we are still seeing healthy demand, we have seen some evidence of a global moderation from peak post-COVID travel,” said CFO Hugh Johnston on an earnings call.
“While pressures from wages, reopening costs and demand impacts are expected to persist in [fiscal] Q4, we do expect year-over-year Experiences operating income growth to rebound significantly in the fourth quarter,” he continued.
This expected rebound, however, will be largely offset by major one-time expenses in the fall that will eat into double-digit growth.
Disney has struggled to entice families back to its parks since fully reopening after the pandemic, largely due to sharp increases in costs that have made a visit unaffordable for the average American family. Oftentimes families are choosing higher-end experiences, such as cruises or international travel, over a trip to one of Disney’s parks for roughly the same cost.
Nonetheless, Disney continues to believe in its parks business, one of the three main legs of the company. Last month, Disney’s Chairman of Experiences, Josh D’Amaro revealed the company’s plan to spend $60 billion in the next decade on new parks and cruise line experiences.
These expansions will largely focus on major IPs that have yet to be explored in this context, such as FROZEN, COCO and the majority of Marvel’s superheroes.
“Imagineers on my team are in with Kevin [Feige] and his team thinking about those characters and how they might come to life inside of our theme parks, and what an attraction might be,” D’Amaro told The Hollywood Reporter. “So if you’re looking at some of the recent releases that Kevin and the Marvel team have had, almost day-and-date with those releases, the characters find their way into the theme parks.”
Movieguide® previously reported:
Disney’s Chairman of Experiences, Josh D’Amaro, will head the company’s $60 billion theme park and cruise investment scheme over the next ten years.
His next moves must be carefully planned if Disney is going to make a return on its gigantic investment.
“At his disposal is a wealth of unexploited IP (at least in parks and cruise lines) and more than 1,000 acres of land available for development across the company’s six resorts,” The Hollywood Reporter said.
“We will have enough room to build the equivalent of another Disneyland Park. And so then you start to think about, ‘Well what can we do here?’ ” D’Amaro said. “We haven’t told anything, any stories on Wakanda. We haven’t told any stories on FROZEN, although it’s a 10-year old franchise. You think about franchises like COCO and ENCANTO. We almost have an endless stream of stories that we can tell.”
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