The Walt Disney Company stock closed for the day at $141.87 a share before reporting their earnings for the third quarter (Q3) of fiscal year 2019 which ended on June 29, 2019. According to Bob Iger,.
“Our third-quarter results reflect our efforts to effectively integrate the 21st Century Fox assets to enhance and advance our strategic transformation,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “I’d like to congratulate The Walt Disney Studios for reaching $8 billion at the global box office so far this year–a new industry record–thanks to the stellar performance of our Marvel, Pixar and Disney films. The incredible popularity of Disney’s brands and franchises positions us well as we launch Disney+, and the addition of original and library content from Fox will only further strengthen our direct-to-consumer offerings.”
Diluted earnings per share (EPS) from continuing operations for the quarter decreased 59% to $0.79 from $1.95 in the prior-year quarter. Excluding certain items affecting comparability(1), EPS for the quarter decreased 28% to $1.35 from $1.87 in the prior-year quarter. EPS from continuing operations for the nine months ended June 29, 2019 decreased to $5.98 from $6.81 in the prior-year period. Excluding certain items affecting comparability(1), EPS from continuing operations for the nine months decreased 15% to $4.75 from $5.60 in the prior-year period.
The Parks, Experiences & Products (which includes Disney Cruise Line) saw revenues for the quarter increase 7% to $6.6 billion and segment operating income increased 4% to $1.7 billion. Operating income growth for the quarter was due to increases at Disney’s consumer products businesses and Disneyland Paris, partially offset by a decrease at their domestic parks and resorts. Results included a benefit from a shift in the timing of the Easter holiday. In the current year, the entire Easter holiday fell in the third quarter, while the third quarter of the prior year included only one week of the Easter holiday.
The increase at Disney’s consumer products business was due to growth at their merchandise licensing and retail businesses. Growth at merchandise licensing was primarily due to higher revenue from merchandise based on Toy Story, partially offset by a decrease from Star Wars merchandise. The increase at Disney’s retail business was due to higher comparable store sales and online revenue.
Higher operating income at Disneyland Paris was primarily due to higher average ticket prices, partially offset by labor and other cost inflation and lower attendance.
The decrease in operating income at the domestic parks and resorts was due to higher costs and lower volume, partially offset by increased average per capita guest spending. Higher costs were driven by labor and other cost inflation and expenses associated with Star Wars: Galaxy’s Edge, which opened at Disneyland Resort on May 31. The decrease in volume was due to lower attendance, partially offset by higher occupied room nights. Guest spending growth was primarily due to higher average ticket prices and increased food, beverage and merchandise spending.
For more information and an overall report click over to the Q3-2019 Earnings Report.