Yahoo Finance United Parks & Resorts Inc (PRKS) (Q1 2024) Earnings Call Transcript Highlights: Navigating ...
Total Revenue: $297.4 million, up 1.4% year-over-year.
Net Loss: Reduced to $11.2 million from $16.5 million in Q1 2023.
Adjusted EBITDA: Increased to $79.2 million, up $6.7 million from Q1 2023.
Attendance: Increased by approximately 72,000 guests or 2.1%.
In-park Per Capita Spending: Increased by 4% excluding certain one-time revenues.
Admission Per Capita: Decreased by 0.9% to $48.06.
Operating Expenses: Decreased by $7.8 million or 4.5%.
Share Repurchase: 375,000 shares for approximately $20.2 million in Q1; additional 1.5 million shares for approximately $80.6 million post-Q1.
Liquidity: Approximately $577 million available, including $204 million in cash.
Capital Expenditure: $87.3 million in Q1, with $175 million expected for core CapEx and $50 million for expansion/ROI projects in 2024.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
United Parks & Resorts Inc (NYSE:PRKS) reported record financial results for the quarter, including record revenue and adjusted EBITDA.
In-park per capita revenue, excluding certain one-time revenues, increased by 4% during the quarter, marking the 16th consecutive quarter of growth.
The company launched several new attractions and events, including SeaWorld Park's 60th anniversary celebration, which is expected to drive attendance and revenue.
Booking trends at Discovery Cove and group bookings are running well ahead of 2023, indicating strong future revenue potential.
United Parks & Resorts Inc (NYSE:PRKS) has a strong balance sheet with approximately $577 million in total available liquidity, providing flexibility for future investments and shareholder returns.
Negative Points
The quarter's attendance was negatively impacted by unusually wet and cold weather, particularly in the Florida parks, which affected peak attendance days.
International visitation is still down compared to 2019 levels, despite showing improvement over 2023.
Admission per capita decreased by 0.9% due to the net impact of the admissions product mix compared to the prior year quarter.
In-park per capita spending decreased slightly due to a decrease in one-time revenue related to international services agreements.
The company reported a net loss of $11.2 million for the quarter, although this was an improvement over the net loss of $16.5 million in the first quarter of 2023.
Q & A Highlights
Q: Can you provide insights on how you're thinking about per capita spending, both on the admissions and in-park side, for the remainder of the year? Are there any potential headwinds or considerations for pricing strategies? A: CEO Marc Swanson indicated that pricing strategies will continue to focus on year-over-year growth. He noted that while group business and multi-day tickets, which typically have lower per capita spending, are increasing, the company is still confident in their overall pricing strategy. In April, admissions per capita was flat to slightly positive, and deferred revenue at the end of April was up 1.4%, indicating effective pricing strategies. In-park per capita spending is expected to normalize following one-time benefits from the previous year.
Q: What are the updates on potential hotel investments, and how do you plan to balance these investments with other capital allocation priorities like share repurchases? A: CEO Marc Swanson explained that the company is focused on ensuring a high return on investment for hotel projects, targeting an unlevered cash-on-cash return of 20%. The company is exploring various structures and partnerships for these investments and is considering financing options that do not solely rely on cash reserves. This approach allows flexibility in capital allocation, including continuing share repurchases.
Q: Could you discuss the underlying demand trends at your parks, particularly how shifts in timing and weather have impacted attendance? A: CEO Marc Swanson shared that combined attendance for March and April was slightly positive when adjusting for timing shifts like Easter and additional weekend days. He noted that weather had a significant negative impact earlier in the year, particularly in Florida, which offset some of the benefits from favorable timing shifts.
Q: Are there ongoing cost savings initiatives, and what is the potential for additional savings beyond the targeted $50 million in 2024? A: CEO Marc Swanson reaffirmed the commitment to achieving $50 million in cost savings in 2024 and indicated that the company is actively exploring additional cost-saving measures. While specific details were not shared, he emphasized the company's focus on continuous improvement in cost management.
Q: How is the consumer spending behavior trending, particularly in light of economic uncertainties? A: CEO Marc Swanson observed positive trends in consumer spending within the parks, citing increases in in-park spending and deferred revenue. He mentioned that bookings at Discovery Cove and group bookings are also up, suggesting robust consumer engagement and spending despite broader economic concerns.
Q: What is the progress on international attendance recovery, and how does it compare to pre-pandemic levels? A: CEO Marc Swanson noted that international attendance is improving but remains down by approximately 35% compared to 2019 levels. He highlighted the significant potential for recovery in international attendance, which could provide a substantial boost to overall attendance and revenues once it rebounds to pre-pandemic levels.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
