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Did a Shift in Easter Hurt Disney’s Park Revenue Growth in Q2?

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Disney’s theme park revenue

The Walt Disney Company (DIS) earns a significant portion of its revenue from its theme parks. In the second quarter of fiscal 2019, Disney’s Parks, Experiences and Products segment reported revenue growth of 5% YoY (year-over-year) to $6.2 billion, while its operating income also rose 15% YoY to $1.5 billion. The increase came on the back of consistent growth at the company’s domestic theme parks and resorts, improvements in its consumer products business driven by its games business, and its cruise line business.

However, a shift in the timing of Easter to the company’s third quarter of fiscal 2019 adversely affected its second-quarter revenue. In the previous year’s quarter, the company gained from the week of the Easter holiday.

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Domestic theme parks

Disney spends the majority of its total investments on its theme parks and resorts and earns operating income mainly from the growth in its domestic theme parks and resorts. In the quarter, increased guest spending, higher attendance, and a higher number of occupied room nights at the Walt Disney World Resort led to growth. However, higher costs due to labor and other cost inflation and costs for new guest offerings offset the company’s operating income growth in the quarter.

Results in the company’s international operations were higher in the second quarter of fiscal 2019 primarily due to growth at the Hong Kong Disneyland Resort. Operating results at the Shanghai Disney Resort were comparable to the previous year’s as an increase from higher average ticket prices was offset mainly by lower attendance.

Future investments

The company has plans to open two Star Wars: Galaxy’s Edge attractions: one in Disneyland in May and the other in Disney World in August. Disney also plans to invest in new hotels, cruise ships, and many more of its parks around the world, including in Paris and Tokyo.

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