Almost like a dentist appointment you know has been coming, but you’re not looking forward to nonetheless, The Walt Disney Company is scheduled to hold their third quarter earnings call today. The company has been devastated by COVID-19 across divisions, but it’s the Parks, Experiences, and Products that stand to lose the most.
Analysts are forecasting a loss of $2 billion for the Parks division, compared to a profit of $1.7 billion last year. The losses are expected though, as the domestic Disney theme parks closed down in mid-March, and Walt Disney World reopened in mid-July. That means that zero guests entered the domestic Disney theme parks during the entire fiscal third quarter.
- Aerial Tour of Empty Magic Kingdom at Walt Disney World
- Aerial Tour of Empty Disney’s Hollywood Studios at Walt Disney World
- Aerial Tour of Empty EPCOT at Walt Disney World
There should be a little bit of cash flow into the Parks division though, with Shanghai Disneyland having reopened on May 11th and Hong Kong Disneyland on June 18th. That said, international theme parks don’t contribute a lot to the coffers, and this earnings report might provide additional insight into just how much they can contribute during a pandemic.
The losses won’t be the story though, that’s expected. What investors will really want to hear is how the reopening of the Vacation Kingdom in Orlando has gone, and what the plans are going to be to right the ship for the remainder of the year. COVID-19 cases still remain high in Florida, potentially leading to many families skipping a fall or winter trip to Walt Disney World. Out west, Disneyland still hasn’t received state approval to reopen, a shocking move after they very publicly announced that they would be reopening on the anniversary of Walt’s park – July 17th.
Here at BlogMickey.com, we’ve been covering the reopening of Walt Disney World, and there is no doubt that the massive pent-up demand that Disney execs were counting on to boost their summer return to operations hasn’t materialized. As a matter of fact, even with Disney’s restrictive theme park reservation system and an overall cap on attendance, reservations are still available every day for select ticket types – signaling a lack of demand for a Disney World vacation this summer.
Within the theme parks, Disney is still dealing with a bitter union negotiation to bring back stage show performers, a staple of Disney Parks entertainment. In the interim, Disney has debuted new shows that simply fill a gap in scheduling, but the new shows fall short in filling the gap in entertainment at the parks.
While the rest of the industry shrinks its workforce, shrinks its future plans, and shrinks in operating income, it will be interesting to see what picture Disney CEO Bob Chapek is able to paint this afternoon at 4:30pm EST.
Watch here: https://thewaltdisneycompany.com/disneys-q3-fy20-earnings-results-webcast/
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