by Lacey Pfalz
Last updated: 1:45 PM ET, Wed August 7, 2024
Disney expects its theme parks to see a slight dip in demand through the rest of the year, according to its third quarter fiscal year earnings statement.
The parks, which are part of the entertainment giant’s “experiences” category, saw a 2 percent year-over-year revenue increase and a 3 percent decrease in operating income, at $2.2 billion during the quarter. Yet the company admitted it expects domestic inflation to discourage American travelers from heading to the domestic parks over the next few quarters.
In July, Disney dropped some of its prices of theme park tickets, food and hotel prices to try and encourage more budget-conscious travelers to visit.
While the Experiences category only covers Disney’s parks and Disney Cruise Line, it generates just over half of all profit for the company.
“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,” read the earnings statement.
Despite this downturn in its parks, Disney’s other segments have been doing well. According to Reuters, its operating income nearly tripled in its Entertainment unit, with its steaming services becoming profitable ahead of schedule.
The company also exceeded expectations on adjusted earnings-per-share, which reached $1.39, as opposed to the predicted $1.19. Total revenue rose 4 percent to $23.2 billion, over the $23.1 billion prediction.
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