Disney just beat the crap out of estimates and (surprising part here) guided higher for the year.
Despite collapsing consumer sentiment, a drop off in US park visits, leaning even deeper into cruises (which might be the only way to vaporize your money faster than going to a theme park) and national disinterest in all things Marvel and Star Wars Disney guided pretty much every higher for just about every segment and hiked the annual estimate by over 30c a share.
Just to flex a little more Disney also raised expected cash flow by more than $2 billion.
Oh yeah, Disney also added the news of a new park in Abu Dhabi. Which raises a whole bunch of questions
Let's Grade It!
Financials: A
This is why you have a conglomerate. Parks fall off? Entertainment picks up the slack. Cruises are disappointing? Streaming picks up some slack. This is probably the best quarter for Disney since the return of Iger, given the cross-currents.
Consumer: B+
Park profitability went up despite less traffic. I'd like to think that was because the company was controlling traffic levels by raising prices, a slightly cold but EPS friendly strategy. I don't. I think Disney hiked prices to cover for weak traffic trends. It's mostly anecdotal but I'm hearing negative things about the park experience. Nothing terrible. Just not Disney. Surly workers, more trash than usual, and lighter staffing. Disney is taking a lot of money out of the Parks. It's smart to charge for things like shorter waits in line. But it has to come with a 5-star experience.
Watch the parks and experiences next quarter.
Abu Dhabi: A*
After the earnings release, Bob Iger did a sitdown with CNBC to announce a new park planned for Abu Dhabi. In case ESPN endlessly pushing gambling apps during college games didn't already make it clear: Disney in 2025 is unencumbered by outside objections to things like the human rights record in counties where it does business or pushing addictive products on young people.
Iger is set to retire at the end of next year. Which means nothing unless he can pull off a Big Finish before he goes. This is Disney's first major park announcement since 2011. It's a legacy big, which isn't bearish. Abu Dhabi is looking to the future rather than trying to make up for losing the ESPN monopoly. It's bold and it will make tons of money. It's just a little squirmy, which is why it gets a *
Overall: A
Unless you want to just flat out call BS on Disney's guidance it's very hard to find a reason to hate this quarter. Shares have been dead money the last decade. That's unacceptable. Iger wants to go out on top and he's got six quarters left. He's starting his kick.
