The Walt Disney Company released its earnings report for Q3 2024 this morning, and with it came a 2% increase in revenue — but a 3% decrease in segment operating income. According to the report, Disney anticipates this “moderation” could impact the business for some time to come.
Disney Expecting Lower Demand for Domestic Disney Parks
Disney says in the report that the “demand moderation” for the domestic parks is expected to lead to a decline in Q4 Experiences segment operating income:
At our Experiences segment, we expect that the demand moderation we saw in our domestic businessses in Q3 could impact the next few quarters. While we are actively monitoring attendance and guest spending and aggressively managing our cost base, we expect Q4 Experiences segment operating income to decline by mid single digits versus the prior year, reflecting these underlying dynamics as well as impacts at Disneyland Paris from a reduction in normal consumer travel due to the Olympics, and some cyclical softening in China.
“While we saw a slight moderation, we wouldn’t call it a significant change,” said Senior Executive Vice President and CFO Hugh Johnston when asked about the reduction in demand during the Q&A call following the earnings report release. He cited the reduction as “a bit of a slowdown that’s more than offset by [Disney’s] entertainment businesses,” and also mentioned that 60% of domestic revenue includes Disney Cruise Line.
In the prepared Executive Commentary for this quarter, Disney cites “recent economic uncertainty” impacting consumers for the demand moderation, but “remain confident about the long-term opportunities before us.”
Disney also mentions in the report that they continue to see strong demand fo Disney Cruise Line, though fiscal A4 results “will reflect pre-launch expenses for the Disney Adventure and Disney Treasure.”
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