Key Takeaways from Disney’s First Quarter Earnings Call


Today, The Walt Disney Company reported earnings for its first fiscal quarter (ending January 2nd, 2021), and that the most notable impact on operating income was an estimated loss of approximately $2.6 billion.

It was noted that the results from the quarter were greatly impacted by COVID-19, with the greatest impact stemming from the Disney Parks, Experiences and Products segment due to lengthy closures, reduced capacity, and the suspension of Disney Cruise Line voyages.

Chairman and Chief Executive Officer Bob Chapek said in a written statement, “We believe the strategic actions we’re taking to transform our Company will fuel our growth and enhance shareholder value, as demonstrated by the incredible strides we’ve made in our DTC business, reaching more than 146 million total paid subscriptions across our streaming services at the end of the quarter. We’re confident that, with our robust pipeline of exceptional, high-quality content and the upcoming launch of our new Starbranded international general entertainment offering, we are well-positioned to achieve even greater success going forward.”

Chapek mentioned that work is underway on Harmonious, Remy’s Ratatouille Adventure, and Guardians of the Galaxy: Cosmic Rewind. Chapek said that these additions will make the park [EPCOT] “…more Disney, more family-friendly and more magical.” He also said that he is pleased with the progress thus far on Star Wars: Galactic Starcruiser. Notably, there was no mention of the TRON Lightcycle Power Run Rollercoaster coming to the Magic Kingdom.

At Disneyland, Avengers Campus is currently scheduled to open later in 2021. Mickey and Minnie’s Runaway Railway will be coming to Disneyland Park in 2023.

Below are some of the most important items to note from the call. You can listed to the full earnings call HERE and you can view the official release HERE.

  • Disneyland is expected to remain closed at least through the entirety of the second quarter.
  • Walt Disney World is still operating at 35% of its prior COVID-19 capacity and any increases will be determined by the rate of vaccinations.
  • Disney+ went from 86.8 million subscribers on December 2, 2020 to 94.9 million subscribers on January 2, 2021 – that’s an increase of 8.1 million subscribers in a 30-day period.
  • Domestic theme parks lost $798 million in the quarter where international parks lost $262 million. All of the Disney theme parks that were open during the quarter operated at a profit.

Q&A

  • When asked if Bob Chapek thinks Disney will be able to increase capacity in the parks, Chapek said that the capacity will be determined by the rate of vaccination of the public. He sees this as the “gain factor.” Christine McCarthy said earlier in the call that there is “ample demand” from guests for the Disney parks. Industrial engineering teams have figured out how to increase attendance in the parks while still maintaining safety measures.
  • When asked regarding the DTC release of Soul and any lessons learned, Chapek said that he thought it was a really nice thing to do to release Soul on Christmas Day for Disney+ subscribers, and they were “absolutely thrilled” about the response. Mulan was successful, and a similar structure will be utilized for the release of Raya and the Last Dragon.
  • Black Widow‘s release is still intended to be theatrical, however, that could change depending on the current state of COVID-19.
  • As per Chapek regarding the parks: “With a lens toward maximizing the guest experience” Disney can now “be a little bit more aggressive.” Chapek believes we’ll soon get to see how some of those tactics will come to fruition.
  • When asked how park attendance impacts capacity, McCarthy said that Disney is currently operating at 35% of full capacity. Safety protocols are still being followed while allowing for the increase to 35%. When the WDW parks reopened, they started at less than 35%. According to McCarthy, they’ve seen “really nice growth” in per capita spending in the parks. McCarthy also said that Disney wants “people to have a good time in our parks, and that when they have a good time, they tend to spend more money.”
  • Chapek has no doubt that parks that will reopen or parks that are currently open and possibly seeing an increased capacity will see physical distancing measures and the wearing of masks by guests throughout this year. He also said that if everyone is able to receive the COVID-19 vaccination by April 2021 as Dr. Anthony Fauci hopes, that that would be “a game changer.”
  • Regarding Disney+ and shows like The Mandalorian and the upcoming Boba Fett series, Chapek believes that “powerhouse franchises cranking out” new releases each month is of utmost importance.