News Dismal Q3 Earnings

[GoofGoof]

My 8-12yr old nephews disagree with you completely.

My boys are 9 and 12 and huge SW fans. They even like the prequels They still hate Jar Jar so I’m not the worst parent ever.

It actually brought tears to my eyes when we walked up and they saw the Falcon for the first time. Sometimes it’s great to be able to experience something through the eyes of a kid who doesn’t care about the business making money and is still capable of pure unadulterated joy.

 

[GoofGoof]

You probably couldn't get reservations anyway anytime soon.

There was nothing available for yesterday and nothing for tomorrow when we will be back in DL. I wasn’t paying attention and at some point they went from same day reservations to 14 days in advance. The only thing I wanted to do was cantina but we’ll see that our next time in FL. There’s a lot to do at DL that’s not at WDW so I wanted to focus on that stuff but I had to at least see SW land and fly the MF.

 

[bartholomr4]

The merch issue is a bit of a narrative that's out there that doesn't really paint the full picture. Star Wars merchandise is still much bigger than it was 5 years ago - it's down from its high during TFA. So if you put merch on a scale of 1-10, let's say 2014 was a 4. Then it shot up in 2015 to a 10 due to the whole event nature of TFA, went down to a 9 in 2016 (with Rogue One), and then an 8 in 2017 (TLJ merch was just bad), and is maybe down to a 6 or 7 now with no movies since the end of 2017. What will be interesting to see is what happens with The Rise of Skywalker. If merch recovers a bit, say to 2016/2017 levels, and Rise does 1.3+ Billion, will we still say the franchise is not a phenomenon?
[/QUOTE]

Not to argue but to inform, there was a new accounting rule which transfers some of the income which comes from the sales of merchandise from Consumer Products to Studios and Entertainment as a Royalty. So far year to date this impacted the sales numbers of consumer products by $406 million and in the 3rd quarter by $110 million dollars. Some of what you might be seeing in the reduction in merchandise is this change in cost allocation.... FYI

 

[tissandtully]

I find it hard to believe that these weren’t flying off the shelves...
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None of the Force Link stuff sold well. Not sure why you chose this particular one, but I have an idea. All SKUs for the Force Link stuff is usually in some sort of bargain bin right now.

 

[The_Jobu]

None of the Force Link stuff sold well. Not sure why you chose this particular one, but I have an idea. All SKUs for the Force Link stuff is usually in some sort of bargain bin right now.

Rose Tico has become a bit of a meme with huge piles of her figures being found in toy stores. It’s worth a look for some chuckles.

 

[mikejs78]

I find it hard to believe that these weren’t flying off the shelves...
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I rest my case.

The wording you're looking for is "...missed expectations..."

Failure is a prediction of the future... a future of the land we really don't have enough of a sample of yet to predict with good certainty.

But I think we can easily call the 'opening' a failure in the business sense. Instead of boosting the company's numbers - it's been a drag on the numbers. That's a business failure.

Well, while I'd agree that the opening was a failure, I don't think it has been a drag on the numbers. By what metric? Ticket sales were up, and price was higher. The drop in attendance was due to annual passholders. Now, attendance wasn't nearly what they hoped, but I don't think it materially has been a drag on the numbers.

None of the Force Link stuff sold well. Not sure why you chose this particular one, but I have an idea. All SKUs for the Force Link stuff is usually in some sort of bargain bin right now.

My son loves SW toys. He got a bunch in 2015. He wants more, but he says the current toys just aren't good. He's hoping better ones come out this fall.

 

[flynnibus]

Well, while I'd agree that the opening was a failure, I don't think it has been a drag on the numbers. By what metric? Ticket sales were up, and price was higher. The drop in attendance was due to annual passholders. Now, attendance wasn't nearly what they hoped, but I don't think it materially has been a drag on the numbers.

It was a huge expense that did not generate the associated increase in admissions. The opening caused people to delay trips as evident by the dramatic down turn in admissions... with no 'kicker' to offset them after the fact.

Summer blackouts are not new - yet DL experienced downturns in attendance like it hasn't seen in well over a decade. The park was a ghost town for nearly a month. That's almost 10% of the year...

That is a drag on the numbers.

 

[mikejs78]

It was a huge expense that did not generate the associated increase in admissions. The opening caused people to delay trips as evident by the dramatic down turn in admissions... with no 'kicker' to offset them after the fact.

Summer blackouts are not new - yet DL experienced downturns in attendance like it hasn't seen in well over a decade. The park was a ghost town for nearly a month. That's almost 10% of the year...

That is a drag on the numbers.

Summer blackouts at DL are new in this format. Previously, only the low end select pass was blacked out for the summer. This year, the mid tier Deluxe AP (vast majority of APs) was blacked out.

No doubt they blew it. But other metrics, like non AP ticket sales, increased. Plus, domestic revenue was up half a billion dollars in the quarter. To say it was a drag on revenue just can't be substantiated with actual facts.

 

[The_Jobu]

My son loves SW toys. He got a bunch in 2015. He wants more, but he says the current toys just aren't good. He's hoping better ones come out this fall.

I’m not a toy guy but from what I read the line up was physically not as well crafted as usual.

 

[mikejs78]

I’m not a toy guy but from what I read the line up was physically not as well crafted as usual.

Exactly the case in my opinion. We bought a couple and then returned them, and stopped buying them. Not because our family didn't have interest anymore, but because the quality went down substantially.

 

[networkpro]

I find it hard to believe that these weren’t flying off the shelves...
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I know I'll earn the eternal ire of some, but was there a Mrs Potatohead version ?

 

[flynnibus]

Summer blackouts at DL are new in this format. Previously, only the low end select pass was blacked out for the summer. This year, the mid tier Deluxe AP (vast majority of APs) was blacked out.

No doubt they blew it. But other metrics, like non AP ticket sales, increased. Plus, domestic revenue was up half a billion dollars in the quarter. To say it was a drag on revenue just can't be substantiated with actual facts.

Dude.. you are just taking Disney's line the stat about non-AP admissions as if that makes up for everything. That was them trying to spin something good out of the bad.

The half billion dollars you cite isn't even attributed to domestic parks performance.. they highlighted performance in CP and DLP... 'offset by a decrease at our domestic parks and resorts'

SWGE was supposed to be the splash that blew the doors off the park... instead the domestic parks are cited as what was dragging revenue trends DOWN'. They specifically state LOWER VOLUME at the domestic parks... in a period that was supposed to SHINE.

It doesn't get anymore in your face factual than that. They went from the bell of the ball... to the anchor dragging the whole ship down.

When go from expecting double digit growth... to reporting double digit DROPS - that's called A MISS and a miss that drags down expected numbers.

 

[mikejs78]

The half billion dollars you cite isn't even attributed to domestic parks performance.. they highlighted performance in CP and DLP... 'offset by a decrease at our domestic parks and resorts'

Not according to the financial report. Domestic parks took in 4.4B in Q3 2019, compared to 4B in 2018. Parks and consumer products as a whole took in 6.5B, as opposed to 6B last year.

The comment on "offset by CP and DLP" have to do with income, not revenue. Expenses for domestic parks were higher this year due to the opening of Galaxy's Edge. So even though revenue was up a decent amount, it wasn't to where they wanted it to be. That's the failure. But to say it was dragging revenue down is false as stated in their financial report.

 

[flynnibus]

Not according to the financial report. Domestic parks took in 4.4B in Q3 2019, compared to 4B in 2018. Parks and consumer products as a whole took in 6.5B, as opposed to 6B last year.

The comment on "offset by CP and DLP" have to do with income, not revenue. Expenses for domestic parks were higher this year due to the opening of Galaxy's Edge. So even though revenue was up a decent amount, it wasn't to where they wanted it to be. That's the failure. But to say it was dragging revenue down is false as stated in their financial report.

Dude... when you miss your target... THAT'S A NEGATIVE. That's what we mean by dragging the numbers down. Just being positive % is not the metric that matters... They have a targeted growth, and instead attendance was down 3% for all of domestic parks. That's not 3% off target.. that's 3% DECLINE. And we know the DLR decline was WAY more.

That huge hit to attendance hits the revenue numbers too. Just because they eeked out growth through their other initiatives does not negate the negative impact the huge drop in attendance had.

You're only looking at the net total of all the pieces and saying "ok, still positive.. all ok" instead of looking at what pieces failed to deliver their share and dragging the result down from what it SHOULD have been.

You're too fascinated by the total vs looking at where the total came from.. and what it should have been if all the components did their part.

 

[mikejs78]

Dude... when you miss your target... THAT'S A NEGATIVE.

That's what we mean by dragging the numbers down. Just being positive % is not the metric that matters... They have a targeted growth, and instead attendance was down 3% for all of domestic parks. That's not 3% off target.. that's 3% DECLINE. And we know the DLR decline was WAY more.

That huge hit to attendance hits the revenue numbers too. Just because they eeked out growth through their other initiatives does not negate the negative impact the huge drop in attendance had.

You're only looking at the net total of all the pieces and saying "ok, still positive.. all ok" instead of looking at what pieces failed to deliver their share and dragging the result down from what it SHOULD have been.

You're too fascinated by the total vs looking at where the total came from.. and what it should have been if all the components did their part.

Ok you are now twisting logic to support your original disproven argument. I am not arguing that the launch was a success. They greatly miscalculated and made some boneheaded decisions which caused their results to be far off from expectations. But they still achieved revenue growth even in the domestic parks, due to other factors. That's a positive future indicator. Now they need to retool and learn from their mistakes.

 

[The_Jobu]

Business question: Does Disney have to pay George any royalties?

 

[GoofGoof]

Business question: Does Disney have to pay George any royalties?

He got $4B for the whole Lucasfilm company. Unless they bring him on as a consultant he gets paid nothing more.

 

[GoofGoof]

Dude... when you miss your target... THAT'S A NEGATIVE. That's what we mean by dragging the numbers down. Just being positive % is not the metric that matters... They have a targeted growth, and instead attendance was down 3% for all of domestic parks. That's not 3% off target.. that's 3% DECLINE. And we know the DLR decline was WAY more.

That huge hit to attendance hits the revenue numbers too. Just because they eeked out growth through their other initiatives does not negate the negative impact the huge drop in attendance had.

You're only looking at the net total of all the pieces and saying "ok, still positive.. all ok" instead of looking at what pieces failed to deliver their share and dragging the result down from what it SHOULD have been.

You're too fascinated by the total vs looking at where the total came from.. and what it should have been if all the components did their part.

I think the mouse made a pretty bad decision driven purely by greed. They tried to have their cake and eat it too. I think they would have been perfectly happy with flat attendance at DLR if it meant a large number of current AP holders shelled out an additional $150 for a one day ticket and then paid for the up charge stuff and merchandise. It would have been massively profitable if it went down as planned. Instead way less people than they hoped bit at the double charge and the result was the embarrassment they ended up with.

The huge crowds and monster lines look great in news coverage and for fanboy bragging rights but if a lot of the people in that mob aren’t paying a penny more to get in it’s not a great earnings story. Despite the crowds being light the upcharge stuff is sold out every day so it’s not like they are losing out on the high end merchandise. They probably would have sold a bunch more of those cool coke cans (I am trying to figure out if the 4 I have will set off red flags with TSA in my carry-on. They may be going in the checked luggage) but you would have to sell a bunch of coke to make up for losing the $150 ticket sales. The land is also missing the headliner so larger crowds would overwhelm the MF ride. Again, poor execution of a plan.

 

[ImperfectPixie]

I think the mouse made a pretty bad decision driven purely by greed. They tried to have their cake and eat it too. I think they would have been perfectly happy with flat attendance at DLR if it meant a large number of current AP holders shelled out an additional $150 for a one day ticket and then paid for the up charge stuff and merchandise. It would have been massively profitable if it went down as planned. Instead way less people than they hoped bit at the double charge and the result was the embarrassment they ended up with.

The huge crowds and monster lines look great in news coverage and for fanboy bragging rights but if a lot of the people in that mob aren’t paying a penny more to get in it’s not a great earnings story. Despite the crowds being light the upcharge stuff is sold out every day so it’s not like they are losing out on the high end merchandise. They probably would have sold a bunch more of those cool coke cans (I am trying to figure out if the 4 I have will set off red flags with TSA in my carry-on. They may be going in the checked luggage) but you would have to sell a bunch of coke to make up for losing the $150 ticket sales. The land is also missing the headliner so larger crowds would overwhelm the MF ride. Again, poor execution of a plan.

Might want to pack the caps separately from the bottles on those cokes...someone asked about them and this was their response. (Sorry...tried to find the original tweet, but I don't have that kind of time, lol.)

 

[flynnibus]

Business question: Does Disney have to pay George any royalties?

It seems some youtubers are running with conspiracy theories that Lucas collects royalties and that’s why disney didn’t go OT.

Disney bought lucasfilm wholesale.... if it didn’t own the rights outright that would have been materially significant to disclose IMO. And they didn’t.