Walt Disney Company Q3 Earnings Report

[CastAStone]

So nothing about DL?

What can they say? The state won’t let them open.

 

[Brianstl]

It is nice to see a CEO be as forthcoming about stuff as Chapek actually was in this call.

 

[Krandor]

I'm not expecting an opening before mid September at the earliest. Knotts has already extended their weekend food thing through the second weekend of September so they aren't expecting to be able to reopen the attractions till at least mid September.

All the CA parks are at the mercy of the state. Until the state says they can open they can't plan to. Sucks but just the situation in CA.

 

[dina444444]

All the CA parks are at the mercy of the state. Until the state says they can open they can't plan to. Sucks but just the situation in CA.

I know. I live in LA.

 

[andyman8]

A few thoughts but overall an unsurprising call.

-The positive contribution remarks were interesting. Suggesting that demand for WDW will rebound when the Florida caseload gets under control is a more than a little ambitious if you ask me. I'm curious what they think will happen if Florida's caseload plateaus and then starts to fall but, as the winter approaches, many areas in the Northeast and Midwest (the two largest "fly-in" markets for WDW) see big spikes. That's not even to mention the fear of flying some have at the moment and certainly doesn't factor in the long-term economic displacement that has happened, is happening, and will continue to happen. These are all factors that the booking numbers don't take into account. Most people at the moment aren't planning their lives months out; they're planning a month out. As a result, I can't put much stock in booking numbers for the fall. Remember how many folks had July reservations back in May (when Mr. Chapek was on GMA boasting about pent-up demand and low waits for those "lucky" enough to get in)? Yet how many times have "refilled" the AP reservation bucket?

-Mulan was obviously the big news. The reality is, given what large municipalities like New York and LA are doing, it is now possible that movie theaters in some of the U.S.'s largest markets will be out of commission for quite some time. The Mulan POD releases on Disney+ seems to essentially be an admission of that. Chapek was quick to emphasize this as a "one-off," likely to please exhibitors, but I have a hard time believing that they'd develop an POD infrastructure within Disney+ just for one film. They could've just released it via cable "On Demand" services after all.

Here's my biggest takeaway: it did seem like Bob and Christine at times discussed COVID-19 like it was something the Company was moving beyond. Their job is to be optimistic and to project confidence, but one of my concerns with TWDC management since April has been that they seem to believe that this would be a smooth descent to a trough where they level out and then smoothy ascend to a company-wide bounce back. They described ebb and flows with Florida numbers, but I'd argue that the next 7 to 11 months are going to be full of ebbs and flows for the whole company. Some operations will come online only to be brought back off-line. They talked about "resuming production," but I still have yet to hear about any studio that has been able to fully resume and complete production. Even folks within WDW will tell you that they don't see a real "return to normal" until the back half of next year probably. And even if DL does open at some point in September, the governor there has made it clear he is willing to "re-close" certain businesses if cases get out of control. The DTC focus makes sense, given this context, but DTC also acts as sort of an aggregator of what every other unit of the Company is doing. That unit works its best when all the other units are at their best. For the time being, many of those units have their hands tied.

To be fully honest, given the vaccine timelines, it is likely that there will still be just as drastic disruptions to their businesses at year's end. And remember, the vaccine or therapeutic/treatment is just the beginning of the economic recovery. Don't get me wrong, I think TWDC will be back to firing on all cylinders at some point, but I don't think COVID-19 or the corporate austerity measures are behind us at all. There is still a lot more ahead, unfortunately.

 

[TheMaxRebo]

and my other question with this, is are they still going to do some North America theatre roll out? I was really looking forward to seeing this in an AMC Dolby auditorium like I do for all Disney films. I originally had tickets to go on opening day

Also, for me, how late ng until it is just fully released to Disney+ as part of the service.

We will like pay the $30 anyways but if like this is the only way to see if for the next year or whatever that will make it a lot easier than if other ways withing a few months

 

[dina444444]

Also, for me, how late ng until it is just fully released to Disney+ as part of the service.

We will like pay the $30 anyways but if like this is the only way to see if for the next year or whatever that will make it a lot easier than if other ways withing a few months

my guess is that it will be a 6-9 month window

 

[Eric Smith]

I assume they are gonna piss off all Domestic theater chains with this news, as well...not just D+ subscribers...in fact, I'm not sure anyone will like this news...

Domestic theater chains may not be a thing in a year anyways.

 

[Eric Smith]

If it fails sure it is. If successful they will do more of this no doubt.

This also insulates Disney from the risk of the big domestic theater chains going bankrupt over the next year.

 

[Dsny4fun]

I am the opposite. I love the theater experience. I have a great setup at home but the whole theater experience for big films I miss greatly.

I completely agree with you...I was so looking forward to seeing this on a really big screen...I love going to the movies...I love the whole experience.

 

[J-BOY]

After-hours value appears to have finally leveled off. Still at around $123, a roughly 5% increase. Investors must feel confident enough.

 

[anthony2k7]

After-hours value appears to have finally leveled off. Still at around $123, a roughly 5% increase. Investors must feel confident enough.

I wonder if it will drop on open tomorrow and then slowly rise again over the day?

 

[J-BOY]

I wonder if it will drop on open tomorrow and then slowly rise again over the day?

I think it’s entirely possible. It’s been doing that for many stocks for the last few months too.

 

[DonMa]

Yeah, same. Every business thinks they'll be in good shape when "consumer confidence returns" The question is how long will that take and how long can the company reasonably operate at its current levels? The issue is that no one knows how long it will take. You can see that clearly just by the scores of posters here with trips that have been rescheduled over and over and over again as they wait for things to get better (raises hand as I am thinking of moving my late Feb trip which was rescheduled from December out to May). Back in April, my job planned for three different potential dates for a return to regular business - an optimistic date, a likely date and a worst case date. The optimistic date has gone by, we are not returning on the likely date and we are now hoping for the "worst case" date but will now start planning for a new worst case date just in case. I would have laughed at you if you told me I would still be working from home in August when I packed up a notebook, a laptop and my planner and left my office in mid March.

And I have a personal experience which makes me wince a little when I think of his comments on reservations
When I called to cancel August and was told my trip protection was not refundable (our fault, did not read the fine print) CM advised I push back to 2021. Also said “who knows what they might be giving folks then” or words to that effect. I told him due to weddings, graduations etc 21 was not an option and we were looking at 2022 and that wasn’t available yet. He said move it to 2021 and then move it again when 22 opens up
Now I know this is an obvious play and I could have done it, but the fact that the CM was encouraging it makes me wonder how much of that future demand he counts on now, like then, is money that will actually be spent at WDW.

 

[JacknSally]

https://twitter.com/x/status/1290763513158340611

 

[bookwormde]

Since there are several posts about how the parks "lost" billions of dollars, I just thought I'd mention that the parks did not lose billions of dollars; they earned billions less than they were expected to had they been open and operating normally. There's a difference.

As I review the segment income I am seeing Parks, Experiences and Products an operating loss of 1.96 billion Below from the chart on page 3 and this does not include any costs that are induced in the one time 5+ billion write down.

https://thewaltdisneycompany.com/app/uploads/2020/08/q3-fy20-earnings.pdf

Quarter Ended Nine Months Ended June 27, 2020 June 29, 2019 Change June 27, 2020 June 29, 2019 Change Revenues: Media Networks $ 6,562 $ 6,713 (2) % $ 21,180 $ 18,317 16 % Parks, Experiences and Products 983 6,575 (85) % 13,922 19,570 (29) % Studio Entertainment 1,738 3,836 (55) % 8,041 7,817 3 % Direct-to-Consumer & International 3,969 3,875 2 % 12,114 5,940 >100 % Eliminations (1,473) (737) (100) % (4,576) (1,155) >(100) % Total Revenues $ 11,779 $ 20,262 (42) % $ 50,681 $ 50,489 — % Segment operating income: Media Networks $ 3,153 $ 2,136 48 % $ 7,158 $ 5,696 26 % Parks, Experiences and Products (1,960) 1,719 nm 1,017 5,377 (81) % Studio Entertainment 668 792 (16) % 2,082 1,607 30 % Direct-to-Consumer & International (706) (562) (26) % (2,226) (1,084) >(100) % Eliminations (56) (133) 58 % (529) (174) >(100) % Total Segment Operating Income $ 1,099 $ 3,952 (72) % $ 7,502 $ 11,422 (34) %

 

[MouseEarsMom33]

https://twitter.com/x/status/1290763513158340611

Everyone is pulling their money out of other industries that are in a lot worse condition.

 

[osufeth24]

I completely agree with you...I was so looking forward to seeing this on a really big screen...I love going to the movies...I love the whole experience.

I'm so happy I got to experience Avengers Endgame on opening night. I'd be crushed if this was supposed to come out this year. It was by far the greatest theater experience I have ever had. It was like being at a sporting event

 

[anthony2k7]

Everyone is pulling their money out of other industries that are in a lot worse condition.

Short sellers. DIS will drop tomorrow - I'm fairly sure of it!

 

[Farro]

So what I got from all of this...

Disney will survive the Pandemic.