Gabrielle Russon
Disney World and Disneyland got a shoutout from the company’s chief Wednesday as the parks, experiences, and products division generated $6.7 billion in second-quarter revenue despite the theme parks still limiting attendance.
“Our domestic parks were a standout. They continue to fire on all cylinders,” The Walt Disney Co. CEO Bob Chapek said; guests are spending 40% more compared to the same quarter in 2019.
The company’s leaders discussed everything from the parks’ attendance to how Disney deals with inflation and more during Wednesday’s earnings call.
Two words not mentioned during the hourlong earnings call: Reedy Creek.
Analysts did not ask any questions about Reedy Creek and what would happen next after the Florida Legislature voted to eliminate Disney World’s special government district by June 2023. Chapek did not bring up the issue on his own and did not discuss the latest political backlash Disney has faced from Republicans.
Deutsche Bank analysts wrote last month they did not believe the situation is likely to hurt Disney financially.
Coming out of the pandemic, Disney World and Disneyland still require visitors to make advance reservations to go to the parks. Disney leaders elaborated more Wednesday.
“We’re choosing to limit attendance using our reservation system. And once again, that goes back to us trying to balance demand and attendance throughout the year and not have days when consumers in the parks aren’t enjoying the experience,” said Christine McCarthy, Disney’s chief financial officer. “So, attendance is something that we’re controlling, but we’re doing it to have a better consumer experience.”
Disney added more capacity this spring when it brought back character meet and greets and more entertainment for guests, the company has also said.
McCarthy acknowledged the challenge of inflation, which affects Walt Disney World Resort, large enough that it essentially operates like a small city.
“We do pay close attention to all the recent inflationary pressures, and it covers everything from merchandise to food and beverage,” McCarthy said.
Before the pandemic, Disney World operated a fleet of more than 400 buses — a fleet bigger than many cities, including Orlando’s.
McCarthy said that Disney World has a “very robust” fuel hedging program to fight rising gas prices, so Disney’s gas expenses don’t fluctuate wildly.
“On the supply chain, our business isn’t immune to the global supply chain challenges,” McCarthy said.
That means Disney is looking for new suppliers to diversify who the company buys from and working with current suppliers to get shipments faster, McCarthy went on to say.
“Right now, it’s very difficult to accurately forecast the potential financial impact due to the fluidity of the situation,” McCarthy told analysts. “But you can trust that we are fully aware of it, and we’re working hard to mitigate any pressure on the margin.”
