Disney Sees $350M Profit Hit From Hong Kong, Shanghai Theme Parks In Current Quarter

deadline.com:

Walt Disney chief financial officer Christine McCarthy said the company could record a $350 million squeeze on operating income in the current quarter – it’s fiscal third — from its Hong Kong and Shanghai theme parks, tempering the parks division’s upbeat narrative a bit.Hong Kong Disneyland has ping-ponged and just reopened again on April 21.

The Shanghai Disney resort closed in late March due to resurgent Covid and is still shuttered until further notice.“But it’s a bit of a tale of two cities,” McCarthy said, with trends strong at Disneyland Paris celebrating its 30th anniversary and with its first new themed offering, Avengers Campus, set to open this summer as part of an ongoing expansion, and strong demand at a big hotel that’s been re-themed as Marvel’s Avengers.“What we are seeing in Paris gives me hope [although] hope is not a strategy, that our parks in Asia will see that same rebound when their Covid-related headwinds abate,” she said on a conference call with analysts after quarterly earnings.U.S.

parks are in top form, filled to the gills with higher that ever per capita merchandise and food and beverage sales. Guardians of the Galaxy: Cosmic Rewind, opening later this month at Epcot Center at Walt Disney World, “will be all new capacity,” McCarthy noted.However — Disney is not immune from broader macroeconomic factors, like the highest inflation in two decades that is costing companies more, with many passing those higher prices on to customers.

Energy costs, among others, have skyrocketed. The CFO noted that Disney has a robust energy hedging program that reduces its exposure to high fuel costs, for example.