The Walt Disney Company Reports $2.4 Billion Loss in the Parks, Experiences, and Products Division
Yesterday afternoon, The Walt Disney Company reported earnings for its fourth quarter and fiscal year ended October 3, 2020. Results in the quarter were adversely impacted by the novel coronavirus (COVID-19). The most significant impact was at the Parks, Experiences, and Products segment where since the second quarter of the fiscal year, the company's parks and resorts have been closed or operating at significantly reduced capacity and cruise ship sailings have been suspended.
“Even with the disruption caused by COVID-19, we’ve been able to effectively manage our businesses while also taking bold, deliberate steps to position our company for greater long-term growth,” said Bob Chapek, Chief Executive Officer, The Walt Disney Company. “The real bright spot has been our direct-to-consumer business, which is key to the future of our company, and on this anniversary of the launch of Disney+ we’re pleased to report that, as of the end of the fourth quarter, the service had more than 73 million paid subscribers – far surpassing our expectations in just its first year.”
COVID-19 and measures to prevent its spread impacted the company in a number of ways, most significantly at Parks, Experiences, and Products where theme parks were closed or operating at significantly reduced capacity for a significant portion of the year, cruise ship sailings and guided tours were suspended since late in the second quarter, and retail stores were closed for a significant portion of the year.
Parks, Experiences and Products
The most significant adverse impact in the current quarter and year from COVID-19 was approximately $2.4 billion and $6.9 billion, respectively, on operating income at Parks, Experiences and Products segment due to revenue lost as a result of the closures or reduced operating capacities.
Parks, Experiences and Products revenues for the quarter decreased 61% to $2.6 billion, and segment operating results decreased $2.5 billion to a loss of $1.1 billion. Lower operating results for the quarter were due to decreases at both the domestic and international parks and experiences businesses.
As a result of COVID-19, Disneyland Resort and our cruise line business were closed for all of the current quarter. Shanghai Disney Resort re-opened in May, while Walt Disney World Resort and Disneyland Paris re-opened in mid-July and Hong Kong Disneyland Resort was open for about two weeks at the beginning of the quarter and about one week at the end of the quarter. All of the company's re-opened parks and resorts operated at significantly reduced capacities during the current quarter.
PHOTO: © Walt Disney World Resort. All Rights Reserved.
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