The Walt Disney Corporate reported its first quarter fiscal 2025 income, with the corporate’s Stories (Parks & Hotels + Shopper Merchandise) reporting $9.4 billion in income from October thru December. This covers the nice & unhealthy of those effects as they relate to Walt Disney Global & Disneyland, together with feedback about Lightning Lanes, Epic Universe, park attendance, and extra.
Corporate-wide, Disney’s income beat at the most sensible and backside strains, with income consistent with percentage of $1.76 adjusted as opposed to $1.45 anticipated and income of $24.69 billion as opposed to $24.62 billion anticipated. Web source of revenue greater just about 23% to $2.64 billion, or $1.40 consistent with percentage, from $2.15 billion or $1.04 consistent with percentage, all over the similar quarter final yr. That quantity jumps to $1.76 after adjusting for one-time pieces.
Even if no longer truly related to this website online save for the lengthy shadow it casts over the entirety else, the corporate’s streaming trade reported any other quarter of profitability in spite of a 1% decline in subscribers for Disney+. Alternatively, home subscriptions for the streaming carrier greater by means of 1%, as global numbers declined 2%. This used to be in keeping with earlier warnings from the corporate, that have been reiterated once more in this name as Disney steered traders it expects any other “modest decline” in subscribers all over the second one quarter. General paid Disney+ subscriptions stand at 124.6 million; overall Hulu subscriptions rose 3% all over the quarter to 53.6 million.
Disney’s Stories department (which incorporates Parks & Hotels) income rose 3% all over the quarter to $9.42 billion. Home theme park income accounted for 68% of the department’s overall, or $6.43 billion. Whilst that income marked a 2% development over the similar quarter final yr, the combo of Hurricanes Milton and Helene coupled with declines in attendance and investments in Disney’s fleet of cruise ships dragged down home running source of revenue.
Prior to now, Disney warned that running source of revenue could be adversely impacted by means of roughly $130 million because of Hurricanes Helene and Milton, the latter of which led to the parks to near and had an extended tail of decrease crowds because of cancellations within the days and weeks afterwards. In reality, the hostile have an effect on of the hurricanes used to be $120 million, along side any other $75 million in pre-launch prices for the Disney Treasure. That amounted to a 6% damaging have an effect on on running source of revenue progress for Disney Stories.
All informed, the Stories department posted a 5% decline in home theme park running source of revenue for the quarter, at $1.98 billion. The corporate attributed this to a modest lower in attendance and flat occupancy, coupled with 4% upper consistent with visitor spending. That quantity could be much better however for the aforementioned hurricanes–the weeks across the two noticed considerably decrease crowds.
In the meantime, the global parks had been up a whopping 28% to $420 million. Disney attributes this to each upper attendance and visitor spending, in part offset by means of upper prices because of new visitor choices.
The sturdy overperformance of the global parks is well the most important merchandise of passion to me from all of the income name. Even if Disney didn’t say as a lot, that is most likely attributable largely to Hong Kong Disneyland and Shanghai Disneyland, the place it used to be the primary complete vacation seasons for Global of Frozen and the Zootopia Land.
As we noticed firsthand, the Arendelle house at HKDL is extremely common and the brand new Christmas choices had been an enormous hit with visitors. This over again proves that the parks can play video games seeking to squeeze extra spending out of visitors, however one of the best ways to strengthen the secret is development new sights.
Up 28% on upper attendance and spending in spite of upper prices. All of that makes entire sense in accordance with what we seen, with slammed present stores stuffed with folks purchasing Frozen and Duffy stuff, along side extra leisure than it’s essential to shake a stick at. The kind of win-win for visitors and the corporate that you just love to peer. (Get Walt Disney Global leaders on a airplane to Hong Kong for a “analysis go back and forth” to peer how that means advantages everybody!)
Additionally attention-grabbing used to be the ahead outlook for 2025. Within the Govt Remark, the corporate reiterated that it anticipated fiscal 2025 progress for the Stories section all over the full-year to be 6% to eight% as in comparison to 2024, with progress weighted in the second one part of the yr. This means that they’re nonetheless anticipating Might thru October to be high-growth.
Throughout an interview on CNBC and the income name itself, Disney CFO Hugh Johnston expressed enthusiasm for the Stories section, indicating it carried out higher than anticipated for the fiscal quarter. This, in flip, reinforces the corporate’s optimism for six% to eight% progress.
When requested particularly concerning the opening of Epic Universe, Johnston answered that the corporate anticipated the brand new park to have a “small have an effect on” at the fiscal yr. The analyst who requested the query indicated that Epic Universe’s have an effect on on Walt Disney Global is the number one query he receives. Regardless of that, Johnston didn’t truly say the rest of substance nor did he use the phrases “Common” or “Epic Universe.”
Most certainly a good move to steer clear of headline-grabbing quotes and depriving us of the rest to speak about. Even if we already know from the final income name that Bob Iger and Johnston imagine that Common’s Epic Universe can be “in reality certain” and “really useful” to Walt Disney Global’s attendance and final analysis. This time, Johnston famous that the 6-8% progress components within the “small have an effect on” of Common’s Epic Universe (however no longer by means of that title).
In equity, Johnston additionally didn’t truly speak about the rest within the pipeline for Walt Disney Global or Disneyland this summer time, both, in spite of leisure being most likely drivers of attendance. He did say that the “shopper is a little more potent than we might have anticipated.” He added that buyers are “very worth targeted, and when you ship worth to them, they’re prepared to pay the associated fee for it.” Attention-grabbing take, and one with which many fanatics would agree…albeit possibly no longer in the best way he’s making the purpose.
All of this most commonly aligns with expectancies. Prior to now, Disney CEO Bob Iger warned traders of attendance softness and “call for moderation” into 2025. That used to be not anything new, as the corporate has cautioned of a slowdown at Walt Disney Global. They’ve prior to now attributed this to the tip of “revenge commute,” lapping the fiftieth Anniversary, and deficient climate.
The one different feedback of passion from the income name got here according to a query about Lightning Lane Premier Go and its uptake. Johnston declined to provide stats about its adoption fee, however described it as a top class product and emphasised that Disney is taking a measured option to its rollout. He added: “It’s very a lot in keeping with our expectancies, however we’re transferring gently with that product so as to make it an ideal revel in, each for the shoppers of the product, and for the remainder of our visitors within the park. We really feel nice about it, and that it’ll construct through the years, however it is vitally a lot the early days.”
It’s attention-grabbing that the corporate nonetheless expects Lightning Lane Premier Go to “construct through the years” for the reason that it’s already had lodge restrictions got rid of and is now to be had to all visitors. So both Johnston didn’t know that had came about already (completely believable), it didn’t occur all over the quarter being mentioned so he didn’t point out it (similarly believable), or there’s additional enlargement of LLPP to return.
That final one could also be a chance, particularly against the beginning of the following fiscal yr if Disney wishes to spot alternatives for “progress” on flat or down attendance. The most obvious choices are a Multi-Park Lightning Lane Premier Go or Lightning Lane Premier Go Limitless. Neither would marvel me, as the previous is already to be had at Disneyland and the latter exists at Common. As we’ve discussed prior to now, the worries could be cannibalizing VIP excursion gross sales or reducing duration of keep. It’s no longer a web certain for the corporate if high-spending visitors unexpectedly are doing shorter journeys in dear Deluxe Hotels.
In the end, it used to be a robust quarter for the corporate as an entire, however particularly the Parks & Hotels department. Walt Disney Global and Disneyland are nonetheless appearing neatly sufficient, however it does appear more and more transparent that the tale for the following couple of years can be discovering tactics to squeeze “progress” with out in reality rising the trade.
Conversely, the true progress and enlargement of the global parks is truly spectacular. Expectantly that enhances the corporate’s bullishness within the trade, and making an investment $60 billion in Parks & Hotels over the following decade.
Consider when Disney in reality greater spending on streaming, believing it used to be the long run? It’d be superior to peer an extraordinary win like that for Parks & Hotels, with Disney upping that quantity to $70 billion. Wishful considering, I do know–however it’s what must occur if years upon years of income effects had been dictating those choices.
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YOUR THOUGHTS
Ideas at the Walt Disney Corporate’s Q1FY25 income? What do you take into accounts the corporate’s overview that Epic Universe could have a “small have an effect on” on Walt Disney Global? Will the outlet of Epic Universe lead to decrease attendance or does a emerging tide raise all boats? Be expecting Lightning Lane Premier Go to by hook or by crook amplify once more? Ideas at the 28% progress of the global parks pushed by means of precise enlargement? Do you compromise or disagree with our overview? Another ideas or statement so as to add? Any questions we will be able to mean you can solution? Listening to your comments–even whilst you disagree with us–is each attention-grabbing to us and useful to different readers, so please percentage your ideas under within the feedback!
