Disney's Theme Park Attendance Shows Mixed Signals, Analyst Firm Notes

Walt Disney's theme park attendance in September presented a mixed picture, with overall figures remaining flat year-over-year but declining month-over-month, according to a recent analysis by KeyBanc Capital Markets. While Disneyland saw a modest year-over-year increase, Walt Disney World's attendance mirrored last year's numbers but dropped from August levels. This analysis comes as KeyBanc maintains its 'Sector Weight' rating on Disney stock.

Key Takeaways

• Overall Disney theme park attendance was flat year-over-year and down 11% month-over-month in September.

• Disneyland attendance rose 4% year-over-year, while Walt Disney World attendance was flat year-over-year.

• KeyBanc forecasts slower domestic experiences revenue growth for Disney's fiscal fourth quarter.

September Attendance Trends

KeyBanc analyst Brandon Nispel reported that total Disney theme park attendance for September was flat compared to the previous year, marking an 11% decrease from August. Specifically, Disneyland experienced a 4% year-over-year increase in attendance, alongside a 10% month-over-month dip. Meanwhile, Walt Disney World's attendance remained unchanged from the prior year but saw an 11% decline from August. These figures are significant given that Disney's parks are a substantial contributor to its overall revenue and EBITDA.

Performance and Projections

Despite the mixed September numbers, Walt Disney World's performance showed signs of improvement, accelerating by three percentage points from August. Disneyland continued its positive momentum, marking its third consecutive month of 4% year-over-year growth, largely attributed to its ongoing 70th-anniversary celebration. For the third calendar quarter, overall attendance was flat year-over-year, a slowdown from the 2% growth seen in the second quarter. This was primarily due to a 1% year-over-year decline at Walt Disney World, which was offset by Disneyland's accelerated 4% growth.

KeyBanc projects Disney's fiscal fourth-quarter domestic experiences revenue to grow by 4.9% year-over-year, falling short of the consensus estimate of 7.1% and representing a deceleration from the 10% growth in the fiscal third quarter. The firm anticipates domestic attendance to decline by 1% in the fiscal fourth quarter, a shift from the flat performance in the previous quarter, with per-capita guest spending growth expected to slow to 6% from 8%.

Other Company Developments

In other recent news, Disney has extended the contract of Sonia L. Coleman, Senior Executive Vice President and Chief People Officer, through June 30, 2028, with adjustments to her compensation. Additionally, the company plans to increase the prices for its Disney Plus streaming service starting October 21, with the ad-supported plan rising to $11.99 per month and the ad-free Premium plan increasing to $18.99 monthly.

Investment banks Goldman Sachs and Needham have both reiterated their 'Buy' ratings on Disney stock. Goldman Sachs anticipates an earnings per share beat in the upcoming report, citing strong performance in the Direct-to-Consumer segment and domestic parks. Needham highlighted strategic changes for Disney’s broadcast operations, including the recommendation to simulcast ABC content on Hulu. Furthermore, "Jimmy Kimmel Live!" is set to resume after a suspension.

Sources

• Walt Disney stock shows mixed theme park attendance trends, KeyBanc notes By Investing.com, Investing.com.