Disney theme park division posts first profit since pandemic slammed amusements industry – CNBC

A masked couple poses for photos in front of a statue of Walt Disney and Mickey Mouse, with Sleeping Beauty Castle behind, at Disneyland Resort in Anaheim, CA, as visitors return to the park with covid-safety restrictions in place, including the park only being at 25% capacity, Monday, May 3, 2021.

Jay L. Clendenin | Los Angeles Times | Getty Images

Disney said Thursday its parks, experiences and products division returned to profitability for the first time since the pandemic began, as losses at its theme parks narrowed and merchandise sales soared.

Revenue at Disney’s parks, experiences and products segment jumped 307.6% to $4.3 billion, up from $1.06 billion during the same period last year.

In each of the previous five quarters, Disney has reported a loss in operating income in the segment because of the Covid-19 outbreak. During the third quarter, the company’s operating income from parks, experiences and products reached $356 million, compared with a loss of $1.87 billion during the same quarter last year.

Much of this profitability is attributable to the segment’s consumer products business, which saw operating income reach $564 million, up 290% compared with the same period last year. During the quarter, Disney garnered higher revenue from merchandise based on Mickey and Minnie, Star Wars, Disney princesses and Spider-Man.

Domestic theme parks, resorts and experiences reported positive operating income of $2 million, while international posted a loss of $210 million.

The resurrection of the theme park industry is critical to Disney’s bottom line. After all, in 2019, the segment, which includes cruises and hotels, accounted for 37% of the company’s $69.6 billion in total revenue. Typically, theme parks account for the majority of this revenue.

Disney’s domestic parks eased restrictions in April, which led to a boost in attendance. While guest capacity hasn’t returned to pre-pandemic levels, it improved as mask mandates were loosened during the quarter.

Walt Disney World Resort in Orlando, Florida and Shanghai Disney Resort were open for the entire quarter. Last year, during the same period, Disney World was shuttered entirely and the Shanghai location was only open for 48 days. Hong Kong Disneyland was open for 72 days this quarter, compared to 10 days during the same period last year.

Disneyland in California was open 65 days during the quarter and Disneyland Paris was open for 19 days during the third quarter. Both parks were closed for the entirety of the third quarter last year.

However, the delta variant is fueling a surge in Covid cases, prompting local governments to reestablish health and safety measures. There are fears that consumers could dial back spending at movie theaters and theme parks and that gains from the first half of the year could dissipate.

This is a breaking news story. Please check back for updates.

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