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Disney’s Q1 FY24 Earnings Results Webcast
- Thread starter DCBaker
- Start date
Hugh...
Our experiences business posted strong Q1 results with year over year operating income growth of 10% at parks and experiences and 4% at consumer products.
Record setting results this quarter were primarily driven by our performance at Shanghai and Hong Kong theme parks, continued strength at Disney crews line and the success of Marvel's spider man 2 at our games business.
And segment margins expanded by over 50 basis points versus the prior year, an achievement delivered despite tough comparisons at wallet Disney World coming off highly successful 50 anniversary celebration in the prior year and significant cost pressures driven by wage increases.
We remain optimistic -- not withstanding the -- domestically in Q2 and still expect robust OI growth for experiences for the year.
We plan to invest approximately $60 billion into the business over the next 10 years, of which approximately 70% is earmarked for incremental capacity expanding investments around the globe, which we expect to attractive returns.
Our experiences business posted strong Q1 results with year over year operating income growth of 10% at parks and experiences and 4% at consumer products.
Record setting results this quarter were primarily driven by our performance at Shanghai and Hong Kong theme parks, continued strength at Disney crews line and the success of Marvel's spider man 2 at our games business.
And segment margins expanded by over 50 basis points versus the prior year, an achievement delivered despite tough comparisons at wallet Disney World coming off highly successful 50 anniversary celebration in the prior year and significant cost pressures driven by wage increases.
We remain optimistic -- not withstanding the -- domestically in Q2 and still expect robust OI growth for experiences for the year.
We plan to invest approximately $60 billion into the business over the next 10 years, of which approximately 70% is earmarked for incremental capacity expanding investments around the globe, which we expect to attractive returns.
Surferboy567
Well-Known Member
Hey @MisterPenguin props to you for all the work your putting into the cliff notes of this call. Can’t listen right now but can read it. Thanks!
GhostHost1000
Premium Member
Does this mean they are going to have to raise prices to help offset the AP magnets now?
Yeah! Everyone stopped going to WDW this summer because they were spending all their money on TSwift concerts. Or at least that's what some of the apologists/deniers claimed.
Laketravis
Well-Known Member
Here comes the good part..........
Public stoning for the CFO. Sorry, rules are rules."Highly successful 50th anniversary celebration"
GhostHost1000
Premium Member
Yeah I mean between that and everyone mad all the extravagant 50th celebration attraction was no longer there why go lol
Hugh...
Total expenses in Q1 were down 4% versus the prior year and the efficiencies we have been realizing are a key contributor to that progress.
We are also still on track to generate about $8 billion in free cash flow this fiscal year.
Putting all this together, we are confident in the progress we're making and the path it puts us on to become a strong cash generator and earnings c ompounder starting in fiscal 2024.
To that end, we expect full year fiscal 2024 earnings per share, excluding certain items, to increase by at least 20% versus 2023, to approximately $4.60. You already heard from Bob about our updated plans for shareholder returns this year, and as he mentioned, we intend to continue investing in our growth businesses while also maintaining a balanced and disciplined approach to capital allocation.
And with that, we're happy to take your questions.
Total expenses in Q1 were down 4% versus the prior year and the efficiencies we have been realizing are a key contributor to that progress.
We are also still on track to generate about $8 billion in free cash flow this fiscal year.
Putting all this together, we are confident in the progress we're making and the path it puts us on to become a strong cash generator and earnings c ompounder starting in fiscal 2024.
To that end, we expect full year fiscal 2024 earnings per share, excluding certain items, to increase by at least 20% versus 2023, to approximately $4.60. You already heard from Bob about our updated plans for shareholder returns this year, and as he mentioned, we intend to continue investing in our growth businesses while also maintaining a balanced and disciplined approach to capital allocation.
And with that, we're happy to take your questions.
Brer Oswald
Well-Known Member
It’s a bit difficult to sell full priced games within a free to play game. They can definitely try, but I doubt that’s what they are going for. To me, it seems like a desperate attempt to get the Uber normie youngsters aware of the Disney brand again (since Disney + is failing at that and the parks have outpriced most). Maybe it will work, but if the attempt is as shallow as it appears, I doubt it. They’ll probably make their money back though. Probably.
Sirwalterraleigh
Premium Member
CaptainAmerica
Premium Member
Shanghai Frozen. More ships.
But my Imagineering friends say there's reason to be excited for D23 so who knows?
Brian
Well-Known Member
"Highly successful 50th anniversary celebration"
Sirwalterraleigh
Premium Member
I forget which one they blamed Covid for?"Highly successful 50th anniversary celebration"
The 50?
The 100?
The price of wax for bobs yacht?
It’s hard to keep the excuses straight
Laketravis
Well-Known Member
Actually it pertained to the entire Experiences sector, not just parks.
"I'll take 4 new cruise ships for $10B, Bob"
Ben Schwinn with Morgan Stanley, please go ahead. >> Thank you. Good afternoon. You guys had a lot of news for us to chew on tonight. I wanted to maybe start, Bob, asking you about sports. Since you led with that.
You guys have a lot going on with E SPN, new channels, package, flagship, obviously having conversations.
Can you put it all into context for us and how you're thinking about these different products and whether they address different parts of the market and what your priorities are between the two and really what is success for Disney shareholders in sports?
How do we think about that financially and strategically? I was wondering if Hugh had an update for us on expense growth this year.
I think you guided to slight growth overall in 24, last quarter. Seems like you're on track with your savings program.
Any update to that would be appreciated. Thanks so much.
BOB >> Thanks, Ben. Permit me to throw a couple of cliches your way.
As you know, ESPN's always aimed to serve the sports fan effectively, no matter where the sports fan is. All of the steps that we have been taking and that we announced today and will continue to take are aimed at doing just that.
When you think about today's environment where you obviously have some challenges in linear TV, a lot more competition both for people's time and just specifically in s ports, and you think about the fact that ESPN finished 23 in really good shape, ratings continue to rise, sports is still an advertiser's delight, you have to consider that ESPN has been successful in what their primary goal was.
They're reaching sports fans effectively, which is why advertisers and distributors and sports leasing and organizations feel they have to be part of or partnered with ESPN.
As we look to the future, we're obviously mindful of, one, the state of the multi-channel ecosystem, t wo, where people are spending their time and money with media, and you have to basically serve them effectively there.
We have been saying facilitating that taking ESPN in the direct-to-consumer direction was inevitable and that we were looking for partners to do so.
This is really not a first step, it's a second step.
The first step was launching ESPN Plus some years ago which has been quite successful.
The second step is finding these partners to distribute basically the equivalent of a multi-channel sports-centric tier via app.
So one, we're serving sports fans well.
T wo, we're doing it with partners. Three, we're doing it in a more modern way.
Rather than cable and satellite in this case it's app-based. And that's a big step for us, because we know there are a number of people who have never signed up for multi-channel television.
This gives them a chance to do so at a price point that's more attractive than the big fat bundle.
Two, there are people who left the ecosystem because they didn't want those channels or all that cost.
This is a way to preserve a relationship or creating one that are no longer a part of the multi-channel ecosystem.
The next step after this, and we announced today we'll launch it in probably August of 25 is to bring out ESPN flagship, I say on its own, but it will be bundled ultimately with Hulu and Disney Plus.
That will be a very, very immersive, obviously sports-centric app, which will have features that this combination with Fox and with
Turner time Warner Discovery will not have, such as integrated betting, integrated fantasy, likely to have some sales arm or merchandise capabilities, obviously deep dive into stats, and high degree of customization and personalization.
Again, another feature that we'll bring out to engage with sports fans. I can't tell you right now how that ultimately will fit into all of this except it will be a progression.
We haven't really talked much about how it will be bundled except with our own services, but I think success will be for us in this basically migration will be to maintain ESPN's position in sports in general and the affinity that its fans have with ESPN and the attractiveness of ESPN to advertisers and sports leasing. That simple.
HUGH>> I'll take the cost side, Ben. You're right. In the past we've talked about slight growth and operating expenses year over year. We have significant -- coming out of the first quarter.
The team is relentlessly looking to -- both to reinvest back in the business to continue the growth momentum that we have as well as deliver margin growth to the bottom line. Net no change in guidance versus what we said previously.
We should do at least as well as the guidance we previously committed to which was slight growth in operating expenses year over year.
You guys have a lot going on with E SPN, new channels, package, flagship, obviously having conversations.
Can you put it all into context for us and how you're thinking about these different products and whether they address different parts of the market and what your priorities are between the two and really what is success for Disney shareholders in sports?
How do we think about that financially and strategically? I was wondering if Hugh had an update for us on expense growth this year.
I think you guided to slight growth overall in 24, last quarter. Seems like you're on track with your savings program.
Any update to that would be appreciated. Thanks so much.
BOB >> Thanks, Ben. Permit me to throw a couple of cliches your way.
As you know, ESPN's always aimed to serve the sports fan effectively, no matter where the sports fan is. All of the steps that we have been taking and that we announced today and will continue to take are aimed at doing just that.
When you think about today's environment where you obviously have some challenges in linear TV, a lot more competition both for people's time and just specifically in s ports, and you think about the fact that ESPN finished 23 in really good shape, ratings continue to rise, sports is still an advertiser's delight, you have to consider that ESPN has been successful in what their primary goal was.
They're reaching sports fans effectively, which is why advertisers and distributors and sports leasing and organizations feel they have to be part of or partnered with ESPN.
As we look to the future, we're obviously mindful of, one, the state of the multi-channel ecosystem, t wo, where people are spending their time and money with media, and you have to basically serve them effectively there.
We have been saying facilitating that taking ESPN in the direct-to-consumer direction was inevitable and that we were looking for partners to do so.
This is really not a first step, it's a second step.
The first step was launching ESPN Plus some years ago which has been quite successful.
The second step is finding these partners to distribute basically the equivalent of a multi-channel sports-centric tier via app.
So one, we're serving sports fans well.
T wo, we're doing it with partners. Three, we're doing it in a more modern way.
Rather than cable and satellite in this case it's app-based. And that's a big step for us, because we know there are a number of people who have never signed up for multi-channel television.
This gives them a chance to do so at a price point that's more attractive than the big fat bundle.
Two, there are people who left the ecosystem because they didn't want those channels or all that cost.
This is a way to preserve a relationship or creating one that are no longer a part of the multi-channel ecosystem.
The next step after this, and we announced today we'll launch it in probably August of 25 is to bring out ESPN flagship, I say on its own, but it will be bundled ultimately with Hulu and Disney Plus.
That will be a very, very immersive, obviously sports-centric app, which will have features that this combination with Fox and with
Turner time Warner Discovery will not have, such as integrated betting, integrated fantasy, likely to have some sales arm or merchandise capabilities, obviously deep dive into stats, and high degree of customization and personalization.
Again, another feature that we'll bring out to engage with sports fans. I can't tell you right now how that ultimately will fit into all of this except it will be a progression.
We haven't really talked much about how it will be bundled except with our own services, but I think success will be for us in this basically migration will be to maintain ESPN's position in sports in general and the affinity that its fans have with ESPN and the attractiveness of ESPN to advertisers and sports leasing. That simple.
HUGH>> I'll take the cost side, Ben. You're right. In the past we've talked about slight growth and operating expenses year over year. We have significant -- coming out of the first quarter.
The team is relentlessly looking to -- both to reinvest back in the business to continue the growth momentum that we have as well as deliver margin growth to the bottom line. Net no change in guidance versus what we said previously.
We should do at least as well as the guidance we previously committed to which was slight growth in operating expenses year over year.
Sirwalterraleigh
Premium Member
…it’s not the droids we’re looking for
Exactly
It includes the two ships dumping out at lighthouse point…both on the ship and off
CaptainAmerica
Premium Member
MoffettNathanson really hates Hulu Live.
I freaking love Hulu Live.
I freaking love Hulu Live.
Dranth
Well-Known Member
Got it, my brain may have been wish casting that it was directly parks.
Hope your friend is right. I think we all could use some good parks news.