Disney’s Theme Parks & Resorts segment in fiscal 2Q16
In fiscal 2Q16, The Walt Disney Company’s (DIS) Theme Parks & Resorts had a strong quarter with revenues of $3.9 billion, an increase of 4% over fiscal 2Q15. This segment had operating income of $624 million, a rise of 10% year-over-year. Theme Parks & Resorts set new records for the second quarter for revenues and operating income.
The strong performance of this segment was largely driven by the company’s domestic operations. These operations saw a 20% growth in operating income and a rise of 300 basis points in operating margins for operations in the United States. The reason for the rise in operating income was fueled by higher attendance at the company’s theme parks in the United States and higher per capita spending.
Disney also stated in its fiscal 2Q16 earnings call that the company expects this segment to be impacted in fiscal 3Q16 by the shifting of the Easter holiday to fiscal 2Q16 instead of the third quarter.
Disney Cruise Line had the best first half of the year performance ever. It expects that its two new cruise ships announced in March this year will become operational in 2021 or 2023.
Shanghai Disneyland and international theme parks
Disney expects to open its Shanghai Disney Resort on June 16, 2016. It will be Disney’s first resort in mainland China (FXI). Disney expects its pre-opening expenses to be around $300 million in 2016.
The company is leveraging its intellectual property and continues to add new attractions to its theme parks. Late last month, Disney announced its plans to further develop Tokyo Disneyland and Tokyo DisneySea theme parks in Japan (EWJ). It plans to complete these developments by 2020. New attractions will include “enhancements of guest service processes and facilities.”
Last year, Disney’s competitor Comcast (CMCSA) acquired a 51% stake in Universal Studios Japan to fuel its international expansion efforts.
Next, let’s see why Disney shut down its Infinity console games business.