Six Flags misses on Q2 estimates as Disney reports 'softer' parks performance

Six Flags (SIX) underperforms on second-quarter earnings estimates, posting gains of $0.25 per share against expectations for $0.78 per share. This comes as theme park competitor Disney's (DIS) CEO Bob Iger addressed "softer" demand than what was expected in the entertainment company's theme park segment. Yahoo Finance's Josh Schafer, Brooke DiPalma, and Pras Subramanian take a temperature check of the travel bookings for theme parks.

Video Transcript

JOSH SCHAFER: And guys, I have my eye on the amusement parks today and specifically that overall space. Looking at Six Flags earnings coming out this morning, I think the stock closed down about 5%, as they didn't quite meet Street expectations. As you can see there, revenue coming in at $443 million. The Street has been looking for $457 million. And then adjusted EPS also coming in a bit under what Wall Street had expected.

Interesting though, revenues still up from last year. Attendance still up from last year. But sort of an interesting overall dynamic playing out with parks. And then you think about what Bob Iger said on Disney's earnings call last night about parks. And I want to play a bite for you guys of what Iger had to say last night.

BOB IGER: We saw softer performance at Walt Disney World from the prior year coming off our highly successful 50th anniversary celebration. Also, as post-COVID pent-up demand continues to level off in Florida, local tax data shows evidence of some softening in several major Florida tourism markets. And the strong dollar is expected to continue tamping down international visitation to the state.

JOSH SCHAFER: Pras, this just stuck out to me because it's something we've talked about when we were talking about the lowering attendance numbers we had seen at Disney, right? And Disney didn't fully address it. Iger obviously addressing it there last night. And you just wonder, is all of that coming back? Is the visitation going to fully come back? Or did we sort of hit that COVID peak, and now we're kind of past COVID peak demand? And maybe the revenge travel is just going away a little bit?

PRAS SUBRAMANIAN: You know, I think it's definitely-- that's definitely a big piece of it. You know, we spoke about how higher temperatures in Florida may be affecting tenants, but then you had heard Bob Iger talking about the anniversary last year. That was a big year for them. It's going to naturally curtail up. But also, they are seeing some weakness there.

With Six Flags, in particular, I was reading about how, you mentioned, revenue up, but spend down. They're seeing a lot of their flash pass or their season pass users come in, not the people that are spending on day passes. So that's hurting them. It's seeing a more cost conscious consumer coming in to still want to go out but not spend a lot of money. And I think this is part of that post-pandemic revenge travel, revenge fun, whatever you want to call it, going back a bit. And people were saying, hey, I need to spend a little less money.

BROOKE DIPALMA: Right. Consumers certainly pulling back here, especially on these sort of extravagant adventures that they were going on post-COVID and attendance coming in, you know, increase year-over-year, but coming in short of expectations there.

And really, what we're seeing across the board is, I'll be honest, I didn't realize how expensive these tickets were. For Six Flags, it's like $35 to $70. For a standard theme day park pass at Disney $109 to $189. I mean, for a family of four, you're talking upwards of $500. That's not something that the everyday American necessarily put out and do as we're continuing to see this value conscious consumer here in the US.

And also, as you mentioned, Six Flags saying that they had a challenging weather environment in the second quarter with unusually high rainfall. But it's, you know, how much can you blame the weather on, you know, I've been to the park in the wet weather. I'll be honest. And so, you know, it's definitely a challenging environment overall.

JOSH SCHAFER: You do wonder with the heat, though, too, specifically what they were saying in Florida. That stands out to me, because I don't think it's going anywhere. And in the long run, if we continue to keep having hotter and hotter summers, how do you sort of counteract that when you are an amusement park? Because personally, if it's 100 degrees--

BROOKE DIPALMA: I'm not going.

JOSH SCHAFER: I'm not going.

BROOKE DIPALMA: Yeah.

JOSH SCHAFER: Maybe the water park, but I'm not going on an actual roller coaster--

BROOKE DIPALMA: Right. Blizzard Beach might be seeing an increase in attendance, but not the Magic Kingdom.

PRAS SUBRAMANIAN: Exactly. I mean, maybe you cut prices for-- I mean, I know they do have dynamic pricing, but maybe you cut even more. That's probably not where they want to go.