Disney To Take $280,000,000 Operating Income Hit Due To Coronavirus
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Revenue of $20.86B (+36.3% Y/Y) beats by $50M.
Shares are up +1.4%.
Focusing on the "Parks, Experiences and Products" segment, revenue was at $7.4B (up 8%).
"Operating income growth for the quarter was due to increases at merchandise licensing and domestic parks and resorts, partially offset by lower results at our international parks and resorts.
Growth at our domestic parks and resorts was due to higher guest spending and, to a lesser extent, increased attendance, partially offset by higher costs. Guest spending growth was primarily due to higher average ticket prices and an increase in food, beverage and merchandise spending. Higher costs were due to new guest offerings, driven by Star Wars: Galaxy's Edge, and the impact of wage increases for union employees.
The decrease in operating income at our international parks and resorts was due to lower results at Hong Kong Disneyland Resort, partially offset by growth at Shanghai Disney Resort. Lower results at Hong Kong Disneyland Resort were due to decreases in attendance and occupied room nights reflecting the impact of recent events. At Shanghai Disney Resort, higher operating income was driven by an increase in attendance."
Looking forward, Disney expect to take a big hit in the next quarter due to both Shanghai And Hong Kong Disneyland being closed due to the Coronavirus outbreak in China. Disney are estimating that both parks could be closed for up to 2 months, costing the company $280million in operating income.
"At Shanghai Disney Resort, we currently estimate the closure of the park could have an adverse impact to second quarter operating income of approximately $135 million, assuming the park is closed for two months during Q2.
At Hong Kong Disneyland, we currently estimate the closure of the park could have an additional adverse impact to operating income of about $40 million for the second quarter. So in aggregate, we estimate these two factors could result in a decline in Hong Kong Disneyland's Operating income of about $145 million for the second quarter. Again, this assumes the resort is closed for two months."
Source: Seeking Alpha
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About The Author
Ash Hales is a British Disney Parks writer and the voice behind Mickey From The UK. Based in the South of England, he's been visiting Disney Parks for over three decades and launched Mickey From The UK in 2017 to provide practical, straight-talking advice for British guests - without the American bias.
Ash Hales is a British Disney Parks writer and the voice behind Mickey From The UK. Based in the South of England, he's been visiting Disney Parks for over three decades and launched Mickey From The UK in 2017 to provide practical, straight-talking advice for British guests - without the American bias.
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