Start a conversation with waltz disney (SAY 1.76%) fans who regularly visit Disney World in Florida or Disneyland in California, and you might think the business is in trouble. People will complain that national parks are turning away guests with a reservation system keeping tight control over the daily clicks of turnstiles.
Social media is regularly on fire with people lamenting that Disney is more expensive and charging for things that used to be free. “The magic is gone,” is a popular hit at the House of Mouse.
There was some unease even before Disney got involved or dragged into Florida politics, but a “woke” Disney is apparently not a “broken” Disney. The media giant’s national resorts are popping out of the theme park these days.
Wednesday afternoon’s fiscal second quarter saw strong performance for the segment, including one of the juiciest reveals in the subsequent earnings call. Spending per capita at Disney’s national theme parks is up more than 40% from the same pre-pandemic quarter in 2019.
If the magic is gone, it’s only because Disney isn’t a vanishing act.
A whole new world
The financial headlines behind Disney’s quarterly update revolve around stronger-than-expected subscriber growth at Disney+. However, the real driver at both ends of the income statement was Disney’s theme park division.
Revenue from Disney’s theme parks and experiences nearly tripled to $4.9 billion, up 182% from a year earlier. Disneyland and its fleet of cruise ships weren’t in service a year ago. It’s still monstrous growth. National attractions operating profit of nearly $1.4 billion represents a reversal of nearly $2 million from the deficit recorded a year earlier.
Arguably, comparing 2022 to 2021 isn’t fair, with all the headwinds that swirled last year as COVID-19 vaccinations were just beginning to roll out. Good. Let’s pile this last quarter on where we left off in the second fiscal quarter of 2019.
There were no international travel restrictions. Resort hotels were at full capacity and the daily number of guests was longer. It’s always a good look.
Revenue is now 16% higher than the $4.2 billion it generated in the second quarter of fiscal 2019. Operating profit was up 32% from $1.05 million .
Disney is making money from fewer guests, and that brings us to the “over 40%” improvement per capita over the past three years, which is so impressive. It costs more to visit Disneyland or Disney World, but it’s not like admissions, concessions and hotels cost 40% more. People want to to spend more money on Disney memorabilia, and the premium Genie+ platform, where people pay $15 a day to access renowned FastPass lines, is a financial game changer for the media spokesperson .
Stunning financial results will not appease the naysayers. Disney’s record results come at their expense both literally and figuratively. It won’t matter, as long as people keep coming. And the expenses.
As long as Disney delivers record results, while so many consumer-facing companies are still far from peak levels, it’s not going to deviate from this new, but successful, playbook.