The Spirited 11th Hour ...

[wdisney9000]

To give you some idea of the importance of those days, Disney reported that Parks & Resorts operating income was up $176M but more than half of that ($90M) was due to those few extra days.

Thus, a good chunk of the attendance increase was due to the extra days during holiday season included in the quarter.

How/Why is it permissible for the company to claim income and atendance is up $176M even thought its obvious a large chunk of it was due to having additional days added to the quarter? That just seems like flat out cheating to make your numbers look better (for lack of a better term).

It would be like if my wife gives me a honey do list for this week that has 10 chores and I only get 7 of them done in the 7 day (week) period and she is upset I didnt get enough done. But the next week she gives me the same list and after 10 days I have all the chores done and then highlight my victory . My wife would laugh and quickly point out it took me 3 extra days and now Im 3 days behind on the next week of chores. How is different for Disney? If they added days from to this quarter, are they not short those days to profit on the next quarter?

I can only assume the BOD are not ignorant and did not get their position by being morons so why do they (or somebody) not point out that even though profits were up, if you subtract the added days of the quarter you would see that profits were merely from adding days to the quarter? What am I missing?

 

[CaptainAmerica]

Took my first trip to DLR in 15 years last week.

Watched a blackout drunk get carried out of Disneyland. In the middle of Main Street, as people lined up for the parade watched. Her naked rear was flashed to the crowd in the process. Literally never seen anything like it in a Disney park before. Guessing she park hopped after having some fun at Mad T Party.

Liar. That kind of thing only happens in Epcot.

 

[DisneyRoy]

I'm pretty sure everyone expects that

Except the DC Movies Studios. I think they are expecting it to beat out The Avengers.

 

[Animaniac93-98]

Except the DC Movies Studios. I think they are expecting it to beat out The Avengers.

They also expected Man of Steel to make $1 billion worldwide. Didn't happen.

 

[CaptainAmerica]

Also of interest:

• Per Capita Guest Spending: Up 7%
• Per Room Guest Spending: Up 9%
• Room Occupancy: 92%

You have to go back to 3Q2008 to find the last time room occupancy was 92% for a quarter.

During the Q&A, COO Tom Staggs mentioned potentially "expanding our hotel capacity down the road."

Disney's domestic theme parks are humming. Disney is recognizing this and is finally opening up the spigots on capital spending at WDW. The next several years should be the most exciting time at WDW this century.

A note on hotel occupancy... in an earnings call a year or so ago, Jay Rasulo opined that 85% is functionally "full occupancy" for all intents and purposes. There's so much overlap of people checking in and out on different days that going beyond 85% is extremely difficult to coordinate. He said that sustained 85% occupancy is when they start looking to expand inventory. The fact that they've gone well beyond would indicate that Staggs' comments about "potentially expanding hotel capacity down the road" might be a bit of an under-sell.

 

[ParentsOf4]

How/Why is it permissible for the company to claim income and atendance is up $176M even thought its obvious a large chunk of it was due to having additional days added to the quarter? That just seems like flat out cheating to make your numbers look better (for lack of a better term).

Fiscal quarters typically do not line up neatly with the 7-days-per-week, 365 days-per-year calendar. Consequently, they need to be periodically adjusted.

At long as Disney discloses when this happens as well as its financial impact (which they did), then it's perfectly acceptable.

As you note, this will have an adverse impact on Q2. Disney should be expected to disclose this as well next quarter.

 

[CaptainAmerica]

How/Why is it permissible for the company to claim income and atendance is up $176M even thought its obvious a large chunk of it was due to having additional days added to the quarter? That just seems like flat out cheating to make your numbers look better (for lack of a better term).

To add to what @ParentsOf4 said, there weren't extra days per se. Q1 FY16 was 91 days, just like Q1 FY15 and (almost) every other quarter. Whatever "extra" days they had at the end were offset by fewer days at the beginning. Q1 began on October 4 in FY16 but September 28 in FY15. The "extra" is simply due to the fact that the Christmas week at the end of the quarter are more profitable than the late September / early October week at the beginning of the quarter. Disney uses a modifed 4-4-5 fiscal calendar, meaning each quarter has two four-week months and one five-week month. That means a normal fiscal year has exactly 52 weeks or 364 days. Every few years, they have a year with a 53rd week and 371 days to "catch up." FY15 was a catch-up year. Fiscal 2015 Q4 had 98 days. Fiscal 2015 had 371 days. By the end of the year, it's actually last year that had extra days in total compared to this year. Everything else is just a glitch of timing.

https://en.wikipedia.org/wiki/4–4–5_calendar

 

[Cesar R M]

You are not supposed that.

wait.. what?
I do not understand your post.

 

[brb1006]

Disney just announced a Frozen Holiday Special that will be coming in 2017

 

[doctornick]

Except the DC Movies Studios. I think they are expecting it to beat out The Avengers.

I think there's a trend for studios to have inflated expectations for movie performances -- basically, they seem to "expect" performances in line with best case scenarios as opposed to setting the expectations more modestly and then being happy when/if they are exceeded.

SvB: DoJ is very difficult to accurately predict IMHO. There's a lot of legitimate reasons to think it will do well or even exceptionally -- first appearance of Batman and Superman on screen together, plus first feature film appearance of the most popular female superhero of all time; there's big names involved in the production; it has little competition for a while during its run. On the flip side, there's plenty of reason for caution: MoS had a mixed reception and relatively modest box office for such a big name character; it's soon to reboot Batman after Nolan's films and people might be "sick" of the character; the basics of the plot seemed to have already been revealed via the trailers; there may be too many characters being introduced in one film.

I think DoJ will have a strong opening weekend, but it's legs are going to be very dependent on word of mouth. Basically put, it's going to have to be a good film if it is going to do well at the box office. I could see it only getting $700M worldwide, which is a fine number in isolation, but would be terrible for this hyped of a film and for DC's film universe plans. It's it's well received and beloved by the fanboys, then an Avengers like $1.5-1.6B could be on the table. My prediction would be something a little over $1B worldwide and mixed reception while CA:CW does more like $1.2B. And we get ongoing annoying debates from fanboys in each camp saying that "their" comic book series is better and belittling the other (Marvel detractors saying they have too many jokes and poor villains; DC detractors saying they are too grim and gritty and are not fun).

 

[WildcatDen]

Just going to pause and enjoy that we're on page 69.

This post is useless without pictures. . . ?

 

[WildcatDen]

CMs stood by with a shopping bag to catch her vomit.

Not sure I ever thought I would read this line on this forum

 

[lazyboy97o]

I think there's a trend for studios to have inflated expectations for movie performances -- basically, they seem to "expect" performances in line with best case scenarios as opposed to setting the expectations more modestly and then being happy when/if they are exceeded.

Because these massive numbers are necessary for the films to be profitable for the studio. Hundreds of millions in production and marketing costs means films have to hit nearer and nearer to $1 billion in box office before breaking even.

 

[Tigger1988]

Not sure I ever thought I would read this line on this forum

Never thought I'd witness it!

 

[ford91exploder]

..... besides, wasn't this their way to weed out the number of APs? SO why are they complaining now? Or did the wrong people not get weeded out?

The AP holders that were disgusted with the money grab were not the 'FL Resident' AP holders (aka Lifestylers who don't pay full boat) but the more profitable ones held by DVC and snowbirds who have discovered that there are OTHER places where their money is welcome and not considered 'Bad Business' OOPS!, Well played Disney, Well played indeed.

 

[gonzoWDW]

Because these massive numbers are necessary for the films to be profitable for the studio. Hundreds of millions in production and marketing costs means films have to hit nearer and nearer to $1 billion in box office before breaking even.

Speaking of box office totals, it looks like TFA just broke the $2 billion mark.

http://www.boxofficemojo.com/alltime/world/

 

[Rteetz]

Speaking of box office totals, it looks like TFA just broke the $2 billion mark.

http://www.boxofficemojo.com/alltime/world/

That was a couple days ago.

 

[BrianLo]

Since we are on the topic of box office, a lot was made of how 2015 was going to be Disney's (Buena Vista's) year at the box office. It totally was, just no one saw Universal coming out of no where and out-topping that.

Humour me as I apparently get way too much joy staring at box office numbers.


BV last year became only the third studio ever to cross 2 billion domestically. They still had a fantastic year before Star Wars as they tied for second fastest studio to 1 billion all time. Universal of course blew through those records and managed to hit a billion dollars by June 14th. Something could be made of how BV managed it with a much smaller slate of films than either Uni/Warner have required in the past... For better or worse, the tentpole strategy is currently working with Disney in that regard.

What I'm particularly impressed by is how well position BV is again this year. Studios are a bit boom and bust from one year to the next, Universal as a point of contention will not be speeding past 2 billion again this year. BV actually looks (in part thanks to the spill-over of Star Wars) positioned to do even better this year on certain metrics.

In order to overtake the fastest studio to 1 billion record set by Universal last year, they need to achieve that by June 12th (since it's a leap year), conveniently which is a Sunday. They've already made 284 million and will surely hit 300 as a very low benchmark from the films they still have in theatre now.

They have four major releases between now and then (Zootopia, Jungle Book, Civil War [which will have had 5 weeks since release] and Alice [which will have wrapped a full 3rd week in release]. It's also nice because we have really solid comparables for all films to at least gauge a starting point for what they might make:

Comparable Films to Zootopia total domestic
222 BH6
200 Tangled

Comparable Films to Jungle Book total domestic
200 Cinderella
234 Oz Great and Powerful
241 Maleficent
334 Alice Through the Looking Glass

Comparable Domestic Films to Civil War 5 weeks into release
239 Captain America 2
388 Iron Man 3
431 Age of Ultron

Comparable Domestic Films to to Alice 3 weeks into release
156 Cinderella
186 Oz
275 Alice

Even being on the extreme conservative side: Civil war performs the same as Cap 2 (ok that's really conservative), Alice sheds nearly half the audience and is more like Cinderella (probably more on the likely side), BV is going to absolutely blow that fastest studio to 1 billion record out of the water. In fact, being that conservative they should be passing 1.1 billion by June 12th.

There's an off chance if Zootopia/Jungle Book perform impressively, and Civil War is the hit we are generally expecting - that they could overtake that record a full three weeks earlier! Certainly the opening weekend numbers for Alice should do the trick if they can't quite get there.

 

[Christian Fronckowiak]

Since we are on the topic of box office, a lot was made of how 2015 was going to be Disney's (Buena Vista's) year at the box office. It totally was, just no one saw Universal coming out of no where and out-topping that.

Humour me as I apparently get way too much joy staring at box office numbers.


BV last year became only the third studio ever to cross 2 billion domestically. They still had a fantastic year before Star Wars as they tied for second fastest studio to 1 billion all time. Universal of course blew through those records and managed to hit a billion dollars by June 14th. Something could be made of how BV managed it with a much smaller slate of films than either Uni/Warner have required in the past... For better or worse, the tentpole strategy is currently working with Disney in that regard.

What I'm particularly impressed by is how well position BV is again this year. Studios are a bit boom and bust from one year to the next, Universal as a point of contention will not be speeding past 2 billion again this year. BV actually looks (in part thanks to the spill-over of Star Wars) positioned to do even better this year on certain metrics.

In order to overtake the fastest studio to 1 billion record set by Universal last year, they need to achieve that by June 12th (since it's a leap year), conveniently which is a Sunday. They've already made 284 million and will surely hit 300 as a very low benchmark from the films they still have in theatre now.

They have four major releases between now and then (Zootopia, Jungle Book, Civil War [which will have had 5 weeks since release] and Alice [which will have wrapped a full 3rd week in release]. It's also nice because we have really solid comparables for all films to at least gauge a starting point for what they might make:



Even being on the extreme conservative side: Civil war performs the same as Cap 2 (ok that's really conservative), Alice sheds nearly half the audience and is more like Cinderella (probably more on the likely side), BV is going to absolutely blow that fastest studio to 1 billion record out of the water. In fact, being that conservative they should be passing 1.1 billion by June 12th.

There's an off chance if Zootopia/Jungle Book perform impressively, and Civil War is the hit we are generally expecting - that they could overtake that record a full three weeks earlier! Certainly the opening weekend numbers for Alice should do the trick if they can't quite get there.

Also Finding Dory this summer

 

[BrianLo]

Also Finding Dory this summer

Oh yes, the rest of the year's slate is still really solid too. I wasn't ignoring it, I was just focusing on movies that will be propelling Disney past the 1 billion mark.

Dory, the harder to predict BFG/Pete's Dragon, Doctor Strange, Moana and Rogue one is what will likely push Disney past 2 billion domestically, for the second year in a row!

And maybe (probably) even break last years record.