Yahoo Finance Disney CEO Bob Iger sees 'softer' Walt Disney World results as pent-up demand wanes
Disney (DIS) CEO Bob Iger said performance at the company's flagship Walt Disney World park has been "softer" as the company battles a tourism slowdown in Florida, a strong US dollar, and a decline post-pandemic pent-up demand.
"We saw softer performance at Walt Disney World from the prior year, coming off our highly successful 50th-anniversary celebration," Iger said during the company's third quarter earnings call on Wednesday. "As post-COVID pent-up demand continues to level off in Florida, local tax data shows evidence of some softening in several major Florida tourism markets."
Still, Disney's Parks, Experiences, and Products segment revenue surpassed expectations in the quarter, reaching $8.33 billion versus the expected $8.25 billion.
Operating income for the division came in at $2.43 billion, ahead of estimates of $2.39 billion and above the $2.19 billion earned in the same quarter last year.
"Walt Disney World is still performing well above pre-COVID levels, 21% higher in revenue and 29% higher in operating income compared to fiscal 2019, adjusting for Star Cruiser accelerated depreciation," Iger said.
'Numerous investments' to grow parks
According to data provided by Touring Plans, a trip-planning company that tracks wait times at theme parks, the Fourth of July holiday was relatively quiet at Disney's domestic parks in both Florida and California.
Earlier this year, Disney announced long-awaited updates to its parks reservation system and annual passholder program following intense backlash from consumers over lengthy wait times and sky-high ticket prices.
Following those changes, Iger said the company has received positive feedback from guests, including "strong demand" for the annual passes.
"We're making numerous investments globally to grow our parks business over the next five years, and I'm very optimistic about the future of this business over the long term," he added.
Disney reported fiscal third quarter results that were mixed, with revenue coming in below estimates while adjusted earnings per share topped Wall Street expectations.
These results came after the company revealed its flagship sports network ESPN struck a $2 billion deal with Penn Entertainment (PENN) to launch ESPN Bet, a branded sportsbook.
A Disney+ subscriber miss initially caused shares to slide in after-hours trading, but the stock rose as much as 3% in extended trading after the company said its full-year 2023 capital expenditures would total $5 billion, below its $6 billion forecast.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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