Record profit for Disney

[lt94]

http://mobile.orlandosentinel.com/p.p?m=b&a=rp&id=1153842&postId=1153842&postUserId=41&sessionToken=&catId=6779&curAbsIndex=0&resultsUrl=DID%3D6%26DFCL%3D1000%26DSB%3Drank%2523desc%26DBFQ%3DuserId%253A41%26DL.w%3D%26DL.d%3D10%26DQ%3DsectionId%253A6779%26DPS%3D0%26DPL%3D3

see story above
"Disney's theme-parks division posted a particularly strong quarter, as profit margins that had shriveled during the global economic downturn rebounded sharply. Operating profit at Walt Disney Parks and Resorts surged 33 percent to $421 million on sales that were up 11 percent to $3.1 billion."

and they still can't fix the yeti

 

[Hakunamatata]

I see this as a huge positive in this economy. It is a sign of a strong company. Companies that do the hard things during economic down turns turn out stronger and more competitive when the economy swings up again. I would suspect we will see more growth of the parks (not a 5th gate or anything) but investment in technology and guest experience.

There will be some that will trash this news. I understand that. But realize that the main purpose of any business is to be profitable. A strong profitable business benefits everyone from the shareholders, executives, and employees, to the beneficiaries of the charitable endeavors of the company.

 

[devoy1701]

it's still only a 13.6% profit margin. Though that is higher than the 12.2% that the entire P&R division did during FY10. Odd how they break out Domestic Revenues but not Expenses. They still are way below the margin P&R was running at back in 08 though. I don't know if this is actually a "record profit" for WDW...I actually doubt it.

But this tells us that:
a) prices were raised (given)
b) Operating expenses were cut (probably)
c) Attendence was up (I think we all know that was true this year)

If this is a trend, It would be nice to see continued investment in the parks on top of the critically needed FLE.


EDIT: Oh....your comment kind of took the story out of context when you title the thread "Record Profit for Disney" and then just mention Disney World in your comment. And to that I say... WDW is just a very SMALL segment of the entire company (the entire P&R only making up about 10% of the revenue for the quarter). Everything else I said above stands.

 

[Expo_Seeker40]

How TDA views this: "Great news, let's keep up the good work."

How TDO views this: "Wow! Told you'd they come no matter how much we scale back!"

 

[powlessfamily4]

This is proof that promotions work.... Free dining, room discounts etc. It doesn't matter if the consumer actually saves money in the long run... if the consumer thinks they are getting a deal they will buy. Disney has used smart marketing. You don't have to like it, but you do have to acknowledge it worked. :animwink:


Yea Disney!! Good Job!!

 

[jt04]

I see this as a huge positive in this economy. It is a sign of a strong company. Companies that do the hard things during economic down turns turn out stronger and more competitive when the economy swings up again. I would suspect we will see more growth of the parks (not a 5th gate or anything) but investment in technology and guest experience.

There will be some that will trash this news. I understand that. But realize that the main purpose of any business is to be profitable. A strong profitable business benefits everyone from the shareholders, executives, and employees, to the beneficiaries of the charitable endeavors of the company.

All the "negative Nancies" have been nowhere to be found since this news broke yesterday. Obviously the first thing they had to do was hit the bottle because all their spin and carefully constructed web of misinformation lies in ruins. So now they have to get over their collective hangovers before they coordinate the new spin. It is going to be very interesting to see what the come up with. Interesting in a "hah hah you can't be serious" kinda way. :ROFLOL:

So I have been sitting back waiting for someone to start this thread as it is best it was not me. This is awesome news for the future of WDW (all I care about) as Disney realizes that a little quality can generate good profits then a lot more quality can generate awesome profits.

Build, baby, build.

Oh, and I told you so.

Oh, and way to go TDO!

Oh, and congradulations to Meg and her team!

Oh, and those of you here who say I am out of touch, don't know what I am talking about and just see things through pixie dust colored glasses, you can apologize on your own schedule. But do have the class to apologize :wave:

 

[devoy1701]

All the "negative Nancies" have been nowhere to be found since this news broke yesterday. Obviously the first thing they had to do was hit the bottle because all their spin and carefully constructed web of misinformation lies in ruins. So now they have to get over their collective hangovers before they coordinate the new spin. It is going to be very interesting to see what the come up with. Interesting in a "hah hah you can't be serious" kinda way. :ROFLOL:

So I have been sitting back waiting for someone to start this thread as it is best it was not me. This is awesome news for the future of WDW (all I care about) as Disney realizes that a little quality can generate good profits then a lot more quality can generate awesome profits.

Build, baby, build.

Oh, and I told you so.

Oh, and way to go TDO!

Oh, and congradulations to Meg and her team!

Oh, and those of you here who say I am out of touch, don't know what I am talking about and just see things through pixie dust colored glasses, you can apologize on your own schedule. But do have the class to apologize :wave:

ahem.... it has nothing to do with quality and everything to do with Price Increases for everything, Cutting Costs, and then driving promotions to get people to come during those slower seasons.

And those numbers are still no where close to where they were 4 years go. But alas, you all don't seem to care about actually analyzing the numbers and instead just taking them for face value.

"$3 Billion! That's a big number! They must be doing great work!"

Though I will still congratulate Meg and team for keeping the accountants and execs happy.

 

[jt04]

ahem.... it has nothing to do with quality and everything to do with Price Increases for everything, Cutting Costs, and then driving promotions to get people to come during those slower seasons.

And those numbers are still no where close to where they were 4 years go. But alas, you all don't seem to care about actually analyzing the numbers and instead just taking them for face value.

"$3 Billion! That's a big number! They must be doing great work!"

Though I will still congratulate Meg and team for keeping the accountants and execs happy.

....in the poorest economy since the depression. The tourism business has still not recovered except for very small pockets. WDW being one of them. Under these conditions such profits are outstanding.

 

[devoy1701]

This is proof that promotions work.... Free dining, room discounts etc. It doesn't matter if the consumer actually saves money in the long run... if the consumer thinks they are getting a deal they will buy. Disney has used smart marketing. You don't have to like it, but you do have to acknowledge it worked. :animwink:


Yea Disney!! Good Job!!

Those #s are for all of P&R btw, not just WDW. Disney World alone probably only makes up about 25-30% of that number (i've been trying to find the last time they broke it out that way so I can project out to today). I'm fairly certain the other resorts (including Disneyland) aren't nearly as heavy on the promotions as WDW is.

But at the same time. It's actually an opposite approach that they should be taking IMO. People should be flocking to WDW because the parks and resorts are first class and presenting the newest and most innovative entertainment out there. Not because the promotions make it hard to pass up and a good value (another sign that the prices are too high anyway).

 

[jt04]

Those #s are for all of P&R btw, not just WDW. Disney World alone probably only makes up about 25-30% of that number (i've been trying to find the last time they broke it out that way so I can project out to today). I'm fairly certain the other resorts (including Disneyland) aren't nearly as heavy on the promotions as WDW is.

But at the same time. It's actually an opposite approach that they should be taking IMO. People should be flocking to WDW because the parks and resorts are first class and presenting the newest and most innovative entertainment out there. Not because the promotions make it hard to pass up and a good value (another sign that the prices are too high anyway).

They had to fix Disneyland (DCA 2.0 and the then necessary resort upgrades) before adding to the parks at WDW lest they just cannabalize from the DLR. That is how it appears to me the strategy is playing out.

They want and need a healthy and robust DLR before they can put the emphasis on WDW. It is very clear to me this has been the strategy since Iger took the reins. JMHO.

PS- it was the so-called "walmarting" of merchandise (which is terribly overstated by some) and other financial strategies at WDW that helped build DCA 2.0. If successful it will mean WDW can get more capital improvements to the parks. I believe Iger is so confident DCA and the DLR will be a major success that he felt comfortable enough to go ahead and announce Avatarland. Plus the fact the competition is pressing them in central Florida. The dots all connect.

 

[fosse76]

They had to fix Disneyland (DCA 2.0 and the then necessary resort upgrades) before adding to the parks at WDW lest they just cannabalize from the DLR. That is how it appears to me the strategy is playing out.

You really have no idea what you are talking about, do you? First, the resorts are clearly run pretty independently, so what happens at DLR doesn't depend on what happens at WDW, and vice-versa. And neither resort cannibalizes the other. They attract different segments of the country.

They want and need a healthy and robust DLR before they can put the emphasis on WDW. It is very clear to me this has been the strategy since Iger took the reins. JMHO.

Completely off base. They are managed separately and have different budgets.

PS- it was the so-called "walmarting" of merchandise (which is terribly overstated by some) and other financial strategies at WDW that helped build DCA 2.0.

No, it wasn't. It was DCA's lackluster attendance that forced thepowers-that-be to "fix" it. And while there is probably some overlap in merchandise, DLR has a different merchandise line-up. So even if WDW's merchandise is uninspired, it is not a reflection of DLR's.

If successful it will mean WDW can get more capital improvements to the parks. I believe Iger is so confident DCA and the DLR will be a major success that he felt comfortable enough to go ahead and announce Avatarland. Plus the fact the competition is pressing them in central Florida. The dots all connect.

They aren't related. The success of something at DLR doesn't greenlight projects at WDW. The only time WDW seems to do anything is when they are forced.

 

[devoy1701]

They had to fix Disneyland (DCA 2.0 and the then necessary resort upgrades) before adding to the parks at WDW lest they just cannabalize from the DLR. That is how it appears to me the strategy is playing out.

They want and need a healthy and robust DLR before they can put the emphasis on WDW. It is very clear to me this has been the strategy since Iger took the reins. JMHO.

PS- it was the so-called "walmarting" of merchandise (which is terribly overstated by some) and other financial strategies at WDW that helped build DCA 2.0. If successful it will mean WDW can get more capital improvements to the parks. I believe Iger is so confident DCA and the DLR will be a major success that he felt comfortable enough to go ahead and announce Avatarland. Plus the fact the competition is pressing them in central Florida. The dots all connect.

If anything DL is starting to Canabalize WDW now. And now with WoC and Carsland opening up there and nothing of significance is opening at WDW until 2013 and then not again until 2018 should further strengthen this. I don't think it will be long before DL once again takes the crown for most visited park in the world.

No, it wasn't. It was DCA's lackluster attendance that forced thepowers-that-be to "fix" it. And while there is probably some overlap in merchandise, DLR has a different merchandise line-up. So even if WDW's merchandise is uninspired, it is not a reflection of DLR's.


They aren't related. The success of something at DLR doesn't greenlight projects at WDW. The only time WDW seems to do anything is when they are forced.

The comment about the Merchandise makes absolutely no sense to me! They had to Wal-mart the merchandise at the parks in order to be able to appropriate funds for DCA? We had to sacrifice quality and uniqueness in order to make a "bad" park better? Where does he come up with this stuff?

We all know that Money was appropriated from OUTSIDE of P&R to fix the mess that was DCA. And as Fosse states, what happens in DLR doesn't effect what happens in WDW (with the exception of TDO cloaning rides, but they don't wait to see if something is successful before deciding to bring it here).

 

[Jimmy Thick]

I think any kind of consumer increase in vacation spending is due more to people getting jobs and comfortable with their financials than anything else. But Disney is smart enough to offer fantastic promotions to coincide with the current economic downturn that proves they know more than people think or want to give them credit for.

This news does not shock me at all, Disney runs their corporation right.


Jimmy Thick-Expecting huge crowds for my annual December trip!!!

 

[devoy1701]

I think any kind of consumer increase in vacation spending is due more to people getting jobs and comfortable with their financials than anything else. But Disney is smart enough to offer fantastic promotions to coincide with the current economic downturn that proves they know more than people think or want to give them credit for.

This news does not shock me at all, Disney runs their corporation right.


Jimmy Thick-Expecting huge crowds for my annual December trip!!!

Unemployment virtually unchanged over the past 3 years? Foreclosures increasing? Personal Savings at their lowest levels in about 2 decades?

I really don't think the economy has to do with it. Attendence is still below it's 2008 and 2009 numbers. It's prices and cost cutting.

 

[captainkidd]

It's prices and cost cutting.

Yup.

 

[Monty]

Yup.

Nope.

See what I did there? I contributed as much as you did to the discussion! :king:

Now in response to the subject at hand, I personally believe that people have started coming back who had held off because of the financial downturn. Some may have decided it was just time to move on, others may have saved up when they might normally have gone into debt. In my case, I've actually somewhat benefited from the downturn, my income has increased as normal and my buying power in the U.S. has significantly improved. So I took a much longer WDW trip for my second trip this year than I might otherwise have.

Trying to extrapolate precise cause & effect from one profit statement without all the salient facts is conjecture at best. Suffice to say that Disney made higher than expected profits in a time when other businesses did not.

 

[devoy1701]

Nope.

See what I did there? I contributed as much as you did to the discussion! :king:

Now in response to the subject at hand, I personally believe that people have started coming back who had held off because of the financial downturn. Some may have decided it was just time to move on, others may have saved up when they might normally have gone into debt. In my case, I've actually somewhat benefited from the downturn, my income has increased as normal and my buying power in the U.S. has significantly improved. So I took a much longer WDW trip for my second trip this year than I might otherwise have.

Trying to extrapolate precise cause & effect from one profit statement without all the salient facts is conjecture at best. Suffice to say that Disney made higher than expected profits in a time when other businesses did not.

correct. However, I did an extensive analysis of TWDC financials a couple months ago and extrapolated 4 years worth of financial data and attendence figures into a simplified spreadsheet so I can access it quickly. So being able to see where attendence built to and where it fell to in 2010 and how the profit of the company and the P&R division itself has moved over the past 4 years (including margin and expenses), I can say with an fairly educated guess (and from factual text right from the annual reports) that increased revenues for the past 6 quarters or so are largely due to higher prices and decreases in overhead expeditures. Because attendance and hotel occupancy are still not at their highest levels.

 

[Jimmy Thick]

Unemployment virtually unchanged over the past 3 years? Foreclosures increasing? Personal Savings at their lowest levels in about 2 decades?

I really don't think the economy has to do with it. Attendence is still below it's 2008 and 2009 numbers. It's prices and cost cutting.

The economy has everything to do with it, if it didn't Disney would not have to offer promotions all year long. Disney is doing what it has to make a profit with what they have to work with, and doing a good job apparently.



Jimmy Thick-Honey, I lost my job, lets go to Disney World!!!

 

[muse1983]

http://mobile.orlandosentinel.com/p.p?m=b&a=rp&id=1153842&postId=1153842&postUserId=41&sessionToken=&catId=6779&curAbsIndex=0&resultsUrl=DID%3D6%26DFCL%3D1000%26DSB%3Drank%2523desc%26DBFQ%3DuserId%253A41%26DL.w%3D%26DL.d%3D10%26DQ%3DsectionId%253A6779%26DPS%3D0%26DPL%3D3

see story above
"Disney's theme-parks division posted a particularly strong quarter, as profit margins that had shriveled during the global economic downturn rebounded sharply. Operating profit at Walt Disney Parks and Resorts surged 33 percent to $421 million on sales that were up 11 percent to $3.1 billion."

and they still can't fix the yeti

Ah...another Yeti jab. I expect to see some Yeti love once Pandora opens...and not any sooner since shutting down EE would be a hard blow to AK, they need something else to distract while they come up with a permanent solution for our hairy friend. Oh, and good to hear Disney is doing well now that Harry Potter has died down a bit.

 

[captainkidd]

Nope.

See what I did there? I contributed as much as you did to the discussion! :king:

Now in response to the subject at hand, I personally believe that people have started coming back who had held off because of the financial downturn. Some may have decided it was just time to move on, others may have saved up when they might normally have gone into debt. In my case, I've actually somewhat benefited from the downturn, my income has increased as normal and my buying power in the U.S. has significantly improved. So I took a much longer WDW trip for my second trip this year than I might otherwise have.

Trying to extrapolate precise cause & effect from one profit statement without all the salient facts is conjecture at best. Suffice to say that Disney made higher than expected profits in a time when other businesses did not.

So you're denying that their profits had anything to do with cost cutting?