Disney tops expectations in new earnings report

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Disney’s theme parks are booming, helping the company beat Wall Street expectations with its latest earnings report.

With fears of an economic slowdown and rising inflation nationally, that’s not stopping visitors from heading to Disneyland and Disney World for vacations.

“Demand at our domestic parks continue to exceed expectations with attendance on many days tracking ahead of 2019 levels,” said Disney Chief Financial Officer Christine McCarthy during the earnings call. “In another sign of the robust demand we have seen in our parks and resorts, occupancy at our domestic hotels in the third quarter was 90%.”

Third quarter revenue at Disney Parks, Experiences and Consumer Products skyrocketed to $7.4 billion.

Disney stock rose in after-hour trading after the earnings were released Wednesday.

“We have not yet seen a demand abate at all, and we still have many days when people cannot get reservations,” McCarthy said of the parks. “So we’re still seeing demand in excess of the reservations that we are making available for our guests.”

The high demand comes even as international visitors — who previously made up about 20% of Disney World’s crowds — aren’t fully back to the same numbers pre-pandemic levels.

But if the good times slow down at Disney parks and the demand slows, Disney executives acknowledged the company has moves to bring crowds back.

One strategy is looking at annual passes, the company said. At Disney World, all but one of the annual pass options are currently listed unavailable for sale online.

“We had limited the number of annual passes that we have across some of our businesses and some of the parks,” McCarthy said, without providing more details. “You could loosen up some of those to bring more people in the park and enjoy the park and spend money while they’re there.”

Disney CEO Bob Chapek brought up the parks’ advance reservation system which gives the company greater control of who can visit what park and when, allowing Disney to spread out the demand.

“I think a lot of onlookers look at our park business and try to sum up our success recently and say that it has something to do with pent-up demand. And certainly, there is pent-up demand. But what we’re seeing is far more resilient, far more long-lasting,” Chapek said. 

Guests have an affinity for Disney’s theme parks and for spending extra to personalize their experience, he said.

For Disney, some of the biggest parks highlights for the quarter were the new Disney Wish making its maiden voyage and Disneyland Paris’ debuting the new Marvel Avengers Campus.

“Our parks certainly did have a fantastic quarter,” McCarthy told analysts. “And I just want to say that the parks team is the same team led by Josh D’Amaro that was able to manage through the COVID crisis that impacted the business significantly. They also were able to ramp back in on a very phased basis back to that recovery phase. And they’re now positioned for growth.”