Today, The Walt Disney Company reported its Q4 earnings, and they fell short of expectations for profit and key revenue segments — including Disney Parks, Experiences, and Products (DPEP).
Disney said that DPEP operating income (OI) margin (Domestic) for Q4 2022 was 15%. However, in Q3 2022, the company reported a 30% OI and Q2 saw 28%. That’s a 50% difference from the last quarter.
The Company said that the lower income was a result of “increases at our domestic and international parks and experiences businesses and, to a lesser extent, our merchandise licensing business.” Additionally, guests spent less money this quarter as the summer vacation ended and kids went back to school, an expected phenomenon. Lower revenue from China was also reported as the country struggles with its “dynamic zero-COVID” policy, which emphasizes harsh lockdowns, quarantines, mass testing, and contact tracing to eliminate the virus.
“Operating income growth at our domestic parks and experiences was due to higher volumes and
increased guest spending, partially offset by cost inflation, higher operations support costs and costs for new guest offerings.”
Expenses rose due to costs related to the Disney Wish and Mickey’s Not-So-Scary Halloween Party among other things.
During the call, Christine McCarthy, Chief Financial Officer of The Walt Disney Company, stated that the $65 million loss was due to Hurricane Ian that hit Florida this past September.
Disney Parks, Experience, and Products revenue was reported at $7.4B for Q4, which is about the same as Q3. The DPEP income is only $1.5B for Q4, down $700,000 from Q3.
Better results were seen at their international parks and resorts due to to growth at Disneyland Paris. However, they were partially offset by a decrease at Shanghai Disney Resort, which has closed yet again.
Higher operating results at Disneyland Paris were due to an increase in volumes and higher average ticket prices, partially offset by higher operations support costs. Higher volumes were due to increases in attendance and occupied room nights. The decrease at Shanghai Disney Resort was due to lower average ticket prices driven by a higher mix of annual passholder attendees in the current quarter as a result of COVID-19-related travel restrictions.
Check out our other coverage of The Walt Disney Company’s Q4 Earnings: