Strike up a conversation with Walt Disney (DIS 0.09%) fans who are regular visitors to Disney World in Florida or Disneyland in California, and you might think that the business is in trouble. Folks will complain about domestic parks turning guests away with a reservation system keeping a tight lid on daily turnstile clicks.
The socials are routinely ablaze with folks lamenting how Disney is more expensive and how it's charging for stuff that used to be free. "The magic is gone," is a popular knock on the House of Mouse.
There was some uneasiness even before Disney either dabbled or was dragged into Florida politics, but a "woke" Disney is apparently not a "broke" Disney. The media-giant's domestic resorts are hitting it out of the theme park these days.
Wednesday afternoon's fiscal second quarter saw strong performance for the segment, including one of the juiciest revelations during the subsequent earnings call. Per-capita spending at Disney's domestic theme parks is up more than 40% from where it was for the same pre-pandemic quarter in 2019.
If the magic is gone, it's only because Disney isn't a disappearing act.
A whole new world
The financial headlines behind Disney's quarterly update are gravitating to the stronger-than-expected subscriber growth at Disney+. However, the real driver on both ends of the income statement was Disney's theme-parks division.
Revenue for Disney's domestic theme parks and experiences nearly tripled to $4.9 billion -- up 182% -- compared to the previous year. Disneyland and its fleet of cruise ships weren't in service a year ago. It's still monster growth. Operating income for the domestic attractions of nearly $1.4 billion was a nearly $2 million reversal from the deficit it recorded a year earlier.
One can argue that comparing 2022 to 2021 isn't fair, with all of the headwinds swirling around last year when COVID-19 vaccinations were just starting to roll out. Fine. Let's stack up this latest quarter to where we were in the fiscal second quarter of 2019.
There were no international travel restrictions. Resort hotels were at full capacity, and daily guest counts were on a longer leash. It's still a good look.
Revenue is now 16% higher than the $4.2 billion it served up in the fiscal second quarter of 2019. Operating income has risen 32% from $1.05 million.
Disney is making money with fewer guests, and this brings us to the "over 40%" improvement in per capita over the past three years that's so impressive. It costs more to visit Disneyland or Disney World, but it's not as if admissions, concessions, and hotels cost 40% more. Folks want to spend more money on Disney keepsake merchandise, and the premium Genie+ platform, where folks pay $15 a day for access to the rebranded FastPass lines, is a financial game changer for the media stock bellwether.
Blowout financial results won't soothe the naysayers. Disney's record results are coming at their literal and figurative expense. It won't matter, as long as folks keep coming. And spending.
As long as Disney is delivering record results, while so many consumer-facing enterprises are still well off peak levels, it's not going to veer from this new, but successful, playbook.