The time has come. Disney just released the final earnings report of 2023. So far this year, we’ve heard some major announcements, seen some price increases, and even watched as several Disney executives came and left the company.
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The Q4 earnings report shed light on the future of streaming, parks, experiences, and products, and sports. Disney CEO Bob Iger is extremely optimistic about what’s to come, and the future for shareholders is, per Iger, looking bright. But, just how bright are things looking? Well, Disney claims that its cash flow is headed in a promising direction. Let’s take a look.
Before the Q4 earnings report, Iger sat down with CNBC’s Julia Boorstin to discuss the state of The Walt Disney Company. Boorstin touched on Disney’s plans to “double down” on the parks, referencing the company’s commitment to invest $60 billion over the next ten years. From there, Boorstin asked, “Are you concerned about consumer spending waning, especially if there is not, say, a soft landing with this economy?”
Disney World
In response, Iger replied, “The investments that we’ve made in that business, just by the way and domestically but also globally, have really paid off, and they’ve each paid for themselves in many ways.” He went on to say, “…we felt in looking at the results of the parks that since the returns have been so strong, why not invest more?”
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Iger explained, “So when we looked ahead and how we’ll allocate capital, and you mentioned the guidance that we gave about growing free cash flow in fiscal ’24, we decided that a great place to place our bets or our capital is in the business that’s delivered the best results.” In other words, Disney is betting big on its parks and resorts.
Welcome to Disney World!
In fact, according to CNBC, the company “expect[s] to grow free cash flow in fiscal 2024 significantly versus fiscal 2023,” stating this will approach levels last seen pre-pandemic. Based on the revenue from the Disney Parks, Experiences, and Products in Q4, where Disney reported revenues for the quarter increased from $7.253 billion in the same quarter last year to $8.16 billion this quarter, it seems like the company is optimistic about what’s to come.
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That said, the Walt Disney World theme parks didn’t see the growth that investors were hoping for this quarter. In an interview with CNBC, Bob Iger noted that “blips come and go,” and compared the downturn at the Florida theme parks to the downturn in tourism after the 2001 terrorist attack.
Walt Disney World Railroad
Although growth in Florida was lower than expected, Disney noted that it was pleased with results at the Disney Cruise Line, which saw growth due to “increases in passenger cruise days and average ticket prices.” The company also explained that Disney Vacation Club saw an increase in sales with the addition of the new The Villas at Disneyland Hotel in Disneyland.
Disney Wish
Between that $60 billion investment over the next ten years and the (mostly) promising Q4 earnings report, it seems like Disney has big, bold plans for the future. We’ll be covering even more details about the Disney Q4 earnings call, so stay tuned to DFB for more!
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So, all-in-all, that can roughly equate to at least a decade at minimum before anything gets on paper, permitting is filed and contractual agreements are signed. Then another decade at minimum to actually build, before the first guest are able to walk through the park.