Walt Disney Company Q4 FY 2017 Earnings Results: Parks & Resorts Negatively Impacted by Hurricane Irma

The Walt Disney Company reported their earnings for the fourth quarter (Q4) and fiscal year 2017 which ended on September 30, 2017. Revenue for the fiscal year dropped 1% to $55.1 billion with the quarter down 3% to 12.7 billion. Net income dropped 4% for the year to a record $8.9 billion with the quarter dipping 1% to 1.75 billion.

“No other entertainment company is better equipped to navigate the ever-evolving media landscape, thanks to our unparalleled collection of brands and franchises and our ability to leverage IP across our entire company,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “We look forward to launching our first direct-to-consumer streaming service in the new year, and we will continue to invest for the future and take the smart risks required to deliver shareholder value.”

The Parks and Resorts segment (which includes Disney Cruise Line) saw revenues for the quarter increase 6% to $4.7 billion, and segment operating income increase 7% to $746 million. Operating income growth for the quarter was due to an increase at Disney’s international operations, partially offset by a decrease at domestic operations, which were unfavorably impacted by Hurricane Irma. As a result of the hurricane, Walt Disney World Resort was closed for two days, and Disney Cruise Line canceled three cruise itineraries and shortened two others.

Hurricane Irma led to a $100 million operating income hit between Walt Disney World and Disney Cruise Line operations. Additionally, Hurricane Irma resulted in a 3% drop in year over year domestic guest visits.

Results at the international operations were due to growth at Disneyland Paris and Shanghai Disney Resort. The improvement at Disneyland Paris reflected increases in attendance, guest spending and occupied room nights, partially offset by higher costs, driven by the 25th Anniversary celebration, and a loss from its 50% joint venture interest in Villages Nature. Guest spending growth was primarily due to higher average ticket prices and food and beverage spending. The increase at Shanghai Disney Resort was due to attendance growth and lower marketing costs, partially offset by lower average ticket prices. The decrease in marketing costs reflected costs associated with the grand opening of Shanghai Disney Resort in the prior year.

The decrease in operating income at Disney’s domestic operations was driven by lower results at Walt Disney World Resort, partially offset by an increase at our cruise line, growth at Disneyland Resort and higher sales of vacation club units.

Lower results at Walt Disney World Resort were driven by higher costs and fewer occupied room nights, partially offset by growth in guest spending and attendance, although both were negatively impacted by Hurricane Irma. Higher costs were primarily due to increases in labor and employee benefits, depreciation and marketing. Guest spending growth was due to increased food and beverage spending and higher average daily hotel room rates. Available hotel room nights were lower due to refurbishments and conversions to vacation club units.

Growth at Disney Cruise Line resulted from higher average ticket prices.

Higher results at Disneyland Resort were due to increases in guest spending and attendance, partially offset by higher costs for new guest offerings and marketing. The increase in guest spending was primarily due to higher average ticket prices.

For more information and an overall report click over to the Q4-2017 Earnings Report.

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