Parks & Resorts Division Delivers Excellent Financial Results This Quarter
Disney have released details on their quarterly earnings for its first fiscal quarter ended December 31, 2016, including details on the Parks & Resorts division. Bob Iger said “Our Parks and Resorts delivered excellent results.” He added “With our proven strategy and unparalleled collection of brands and franchises, we are extremely confident in our ability to continue to drive significant value over the long term.”
Here are the details:
Parks & Resorts:
Parks and Resorts revenues for the quarter increased 6% to $4.6 billion and segment operating income increased 13% to $1.1 billion. Operating income growth for the quarter was due to increases at our domestic and international operations. The growth in the quarter was unfavorably impacted by Hurricane Matthew at our domestic operations and a shift in the timing of the New Year’s holiday relative to our fiscal periods. The increase in operating income at our domestic operations was primarily due to growth at our parks and resorts and cruise line.
Higher operating income at our parks and resorts was driven by guest spending growth, partially offset by lower attendance and occupied room nights. The increase in guest spending was due to higher average ticket prices, food and beverage spending and average hotel room rates.
Attendance reflected the prior-year benefit of the 60th Anniversary celebration at Disneyland Resort, the impact in the current quarter from Hurricane Matthew at Walt Disney World Resort and the impact of the New Year’s holiday shift. Costs at our parks and resorts were flat, as labor and other cost inflation and costs for new guest experiences were essentially offset by cost efficiency initiatives.
At our cruise line, growth was due to higher average ticket prices and lower dry-dock expenses. A portion of the dry-dock costs for the Disney Wonder were incurred in the current quarter whereas all of the dry-dock costs for the Disney Dream were incurred in the prior-year first quarter.
Growth at our international operations was due to the opening of Shanghai Disney Resort in the third quarter of the prior fiscal year and higher results at both Disneyland Paris and Hong Kong Disneyland Resort.
Disneyland Paris benefited from a full period of operations, whereas the park was closed for four days in the prior-year quarter. At Hong Kong Disneyland Resort, the increase was due to cost efficiency initiatives.
It looks like the Parks division had a very solid quarter, each park around the world seems to be doing ok and it was the only division to have an increase in revenue from the previous year. With the new Avatar and Star Wars themed areas coming soon, plus more celebrations in Paris, the future does look good plus now that Shanghai is bringing in money, it should have an impact on the divisions books.
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