It is time for another Walt Disney Company earnings call. This call is to discuss the fiscal second quarter 2023 financial results. In the last meeting, we learned that 7,000 cast members would be laid off and that we will one day see Toy Story, Frozen, and Zootopia Sequels. Also announced during the Q1 call was the future Avatar Experience for Disneyland. Let’s jump into what was said in today’s earnings call with Bob Iger.
Reedy Creek Portion of Earnings Call Q&A
During the Q&A portion of the call, Bob Iger was asked about the Reedy Creek situation. Iger said that the lawsuit makes their case very clear. He responded by saying there are 2,000 special districts in Florida with most made to foster development. He further said, “This is plainly a matter of retaliation,” and said, “The question is simple, does this State want us to continue to invest and pay more in taxes, or do they not?” Iger also confirmed that Disney is the largest taxpayer in Central paying over $1.1 billion in state and local taxes last year.
The Walt Disney Company Made Approximately $21.8 Billion
During the call, the Walt Disney Company announced they made approximately $21.8 billion in revenue during the second quarter.
“We’re pleased with our accomplishments this quarter, including the improved financial performance
of our streaming business, which reflect the strategic changes we’ve been making throughout the company to realign Disney for sustained growth and success,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “From movies to television, to sports, news, and our theme parks, we continue to deliver for consumers, while establishing a more efficient, coordinated, and streamlined approach to our
In the quarter, Disney took a $195 million restricting charge, primarily related to severance. They expect to take a similar charge next quarter.
Disney stated that results at the domestic parks and resorts were slightly unfavorable to the prior year quarter, as a decrease at Walt Disney World Resort was largely offset by growth at Disneyland Resort.
They also noted that the decrease at WDW was due to higher costs and partially offset by increased volumes. The higher cost reflected cost inflation, increased expenses associated with new guest offerings, and higher depreciation.
Another factor that was mentioned is guests spending. They said that higher guest spending was due to increases in average ticket prices and average daily hotel room rates. The increase in costs was primarily due to higher operations support.
Bob Iger noted that the parks are improving the guests’ experience with pricing changes and new experiences. He also mentioned that the Disney structure is working and that they are on target to meet or exceed their cost-cutting targets.
The international parks are doing well. Bob said he sees the parks as a growth driver for the company. He then listed all the lands and expansions that would soon open in the international parks. He then moved on to the domestic parks and mentioned the most recent news regarding theme park reservations. Iger noted they are closely monitoring where investing in the parks business makes sense.
During the Q&A portion, Iger was asked about the parks, and he responded by saying that they expect to grow the parks through higher capacity attractions and experiences based on new IP.
Disney+ and Streaming Services
Disney+ subscriptions, Disney+ Hotstar hosted 4.6 million subscriptions during the quarter. Domestically the drop was 300,000. Other international markets saw an increase in subs. ESPN+ subscriptions increased by 2%, while Hulu was nearly even. They will be releasing a one-app experience that will house Hulul within Disney+. Iger said that this new app will hopefully be rolled out by the end of the calendar year. Disney has over 5,000 advertisers for streaming products.
In Europe, they will add an ad tier for Disney+ which will launch by the end of the year. Disney+ will be raising the price of their ad-free level later this year. They aim to update their pricing model to reward loyalty and reduce churn. It is important to note that Disney will be removing some programming from their streaming platforms. Disney expects to produce less content moving forward.
I know this is a lot of information to digest, but there are a lot of positives in all of this. I am glad that Bob Iger was asked about the lawsuit and that he was able to give good answers showing where he stands in all of this. It seems like streaming continues to be a tricky player in all of this, and they are trying to find ways to make it better overall. I do want to mention that before the call, they played the new version of “Part of Your World” from the live-action adaptation of The Little Mermaid. They also played the score from Marvels’s Guardian of the Galaxy Vo. 3. It was a great way to start the call.
Hi, I'm Erica, and I write about all things Disney. Before working for The DIS, I was a theme park performer at SeaWorld, but I also performed at Disney. I have such an immense love for theme parks to the point I studied them in college.