SeaWorld Entertainment (NYSE:SEAS) is getting harpooned today after putting out quarterly numbers that should worry investors and delight Blackfish protestors. Revenue dipped 1%, to $405.2 million, and earnings clocked in at $0.43 a share.
Analysts were expecting a profit of $0.51 a share, with revenue increasing 8% for the quarter. Clearly, that's a pretty big miss on both ends of the income statement, and Wall Street isn't very forgiving. SeaWorld shares opened 27% lower on the news.
This was supposed to be SeaWorld's good quarter. After seeing attendance across all of its parks decline 4% last year and plunge 13% during the first quarter of this year, the company expected that this would be the period when headwinds would become tailwinds. The timing of the seasonally potent Easter holiday -- going from March in 2013 to April in 2014 -- was supposed to create the April school holidays to boost turnstile clicks. Weather was cooperating across many of the chain's theme parks.
There's also the spike in tourism to Central Florida, where five of SeaWorld's parks -- three in Orlando and two in Tampa -- reside. Neighboring rivals Disney's Disney World and Comcast's Universal Orlando seem to be doing just fine. They invested heavily in new attractions. Disney added the Seven Dwarfs Mine Train in the Magic Kingdom, and opened several temporary Frozen-themed attractions at Disney's Hollywood Studios. Universal Orlando countered with the even more ambitious Harry Potter Diagon Alley expansion, announcing last week that more than a million riders have boarded its Hogwarts Express train ride that connects Universal Orlando's two theme parks in a richly themed experience.
SeaWorld -- at a time when it should have been investing in rides and attractions to rinse the controversial Blackfish documentary out of the mouths and eyes of the film's growing base of viewers -- fell asleep at the helm. Outside of a new water slide at Aquatica, and a 335-foot drop tower that has yet to open at Busch Gardens Tampa, SeaWorld was hoping that ramping up in-park entertainment to celebrate an anniversary milestone would do the trick.
It didn't. Orlando's tourism marketing agency recently announced that occupancy levels for area hotels were at their highest level in June since 2005. Disney and Comcast made the most of the uptick in visitors. SeaWorld clearly did not.
This quarter is a disaster, and SeaWorld is now hosing down its guidance for the balance of the year, and beefing up its stock buyback efforts. It's also hinting at cost cuts, making it less likely that it bounces back with magnetic new rides and attractions anytime soon.
"The crowds have been lighter than I recall in previous summers," I wrote last month after hitting up several of SeaWorld's Florida parks in June. My eyes didn't deceive me.