Disney’s Parks and Resorts Perform Well in 2Q15
Is The Walt Disney Company Really 'Firing on All Cylinders'?
Disney’s Parks and Resorts
At a May 13 MoffettNathanson event, The Walt Disney Company’s (DIS) senior vice president of investor relations, Lowell Singer, discussed the company’s Parks and Resorts segment. Singer said, “We’ve done extremely well for a business of its size and maturity here domestically, adding double-digit, sometimes 20% quarter-on-quarter growth, like this previous quarter. And we’re very happy with the direction. It’s a business that we feel we have the true definition of competitive advantage and we want to continue to invest in that around the world.”
Now we’ll look at the recent performance of the company’s Parks and Resorts segment. As you can see in the above chart, Parks and Resorts’ revenue increased during 2Q15. The segment’s revenue grew by ~6% year-over-year to reach ~$3.8 billion in 2Q15.
Parks and resorts’ domestic and international subsegments
The segment’s revenue growth was driven by the company’s domestic business. The segment’s domestic revenues increased by ~8% year-over-year to ~$3.2 billion during the quarter.
Both increased per-capita guest spending and attendance contributed to the year-over-year growth in Disney’s domestic revenues from its parks segment during the quarter. Higher occupancy as well as increased per-room guest spending positively affected the company’s domestic revenues from hotels.
The revenue from the segment’s international operations was affected by the strengthening US dollar (UUP). The dollar decreased by ~8% year-over-year to ~$0.5 billion in 2Q15.
If you want to take on diversified exposure to Disney, you may invest in the Consumer Discretionary Select Sector SPDR Fund (XLY). The ETF held ~7.4% in the company on April 30, 2015. The ETF also held a total of ~12.1% in media companies Comcast (CMCSA), Time Warner (TWX), and Twenty-First Century Fox (FOXA).
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