Disney misses 4th Quarter Earnings, investment in parks down $632M in 2021 vs 2020

[buzlite]

We will probably cancel our Disney trip next year and just do Universal. Harry Potter + Jurassic park is a way better value. Disney is a sinking ship on so many levels. I sold off my stock months ago when Chapek started making changes and I'm glad I did. Chapek is living in the last decade. Companies are built either through insanely high brand loyalty IE Tesla/Apple or by providing free services IE fbook/googl. For consumer based companies at least. Chapek is turning Disney into Chrysler dodge jeep in the 2000s.
Disney not investing in it's creatives is like Tesla firing it's engineers.
Lucky for us we have an alternative that is doing amazing right now. We will probably cancel Disney plus after the new year as well.

 

[Kbrb]

Pushing olde bob to make more money will result in him making more cuts.

I dread to think of the state of the epcot work when hes done. I waited to see what deals disney was going offer the uk market. We have seen free dining, free spending money ect before. You know what we got? 14 days genie for the price of 10......Thats it.

So far they have pushed me to downgrade the hotel to all star, rework my dining plans, next i will look at offsite and less days in. Bravo Bob

 

[mshanson3121]

In total, Disney invested about $4B into parks and resorts in 2020 and in 2021 (Disney's fiscal 2020 ended on October 2nd, 2021) they invested roughly $3.5B so a drop of over $500M ($548M if you do the math based on the earnings report).

This is despite 26% revenue growth to $5.45B in the theme parks division for the quarter,

The company missed Wall Street estimates across the board during the quarter ended Oct 2., sending the stock down more than 4% in after-hours trading.

• Earnings per share: 37 cents adj. vs 51 cents expected, according to Refinitiv
• Revenue: $18.53 billion vs $18.79 billion expected, according to Refinitiv

CEO Bob Chapek also expected to add less Disney+ subscribers in the fourth quarter of calendar year 2021 (low single-digit millions) due to "headwinds".

Despite Disney+ membership slowing, Bob Chapek felt that demand in the parks was still great, he said:



It seems interesting that they are investing less into the parks even though parks are their bread and butter in terms of revenue.

Disney shares are down more than 4% in after hours trading after disappointing the Q4 earnings call.

Source: https://www.cnbc.com/2021/11/10/disney-dis-fiscal-q4-2021-earnings.html
Also during Q4 earnings, Christine McCarthy, the CFO talked about cost cutting measures, despite a 99% increase in Parks revenue compared to Q4 2020 (obviously some parks were still closed during the same quarter last year)...

Interesting data into how many people opted for Genie+ as well...

Signs of a company that doesn't truly care about their guest.

 

[mshanson3121]

Equity firms are downgrading Disney stock now too from "buy" to "hold" or "neutral"...

https://www.marketbeat.com/instant-alerts/nyse-dis-a-buy-or-sell-right-now-2021-11-2-3/
It isn't just one firm either, Atlantic Securities, Rosenblatt Securities, Zacks Investment Research, Wells Fargo...

Ouch.

I'll.admit.this gave me a not small amount of satisfaction. Looks good on them.

They definitely are just another company. But they sell themselves as more than just another company. A lot of the backlash comes from that dishonesty.

This!!!! When you have spent a lifetime (theirs) selling yourself as being totally different from the competition, as always going above and beyond, about caring for the guest,.claiming to be an industry leader etc... and then follow that up with recent actions. Nope. You start to lose your credibility and people start to see you for the greedy company you are.

People may not stop going entirely, but they may stop staying as long. I don't know how that would affect profits overall, and I'm not so stupid as to think Disney execs haven't thought all of this out and done the math, EXTENSIVELY.

BUT I do know I have an upcoming 11 day trip (on dvc rental so non-refundable and I can't make adjustments to the length of my stay now). But when doing my planning it has occurred to me that going forward, it would be cheaper for me to stay only 5 nights or so, and buy Genie+ which would make it easier for me to accomplish all the things I used to accomplish in over a week, in only a few days. That cuts down on my hotel costs, food costs, park ticket costs, merchandise spending etc... all of which MORE than makes up for the $400 I'd blow on Genie+/LL expenditures instead.

I've said it before on another thread, but our June trip is our LAST trip. We are DONE giving Disney our money. At least until there's a major course correction on their part. And the only reason we're even taking the June trip is because it's DD's birthday gift from her grandfather. If it weren't for that, we'd have canceled. Neither DH or I have any excitement or interest in the trip - at least not the Disney portion. We'd far rather be going elsewhere.

So, as it is, the following changes have already been made:

- We cancelled our on site stay
- We will not be buying any Disney food, and that includes character meals - something we've always done
- We won't be paying for any extra experiences (again, something we've always done)
- We definitely will not be buying GP+/LL
- We currently have 4 days booked, but we may drop one of them and spending the money elsewhere

Bob can spout and shout all day about guest satisfaction being up, but that would be a complete lie.

I've been here for 4 days now and never, across 9 trips in 7 years have I ever heard so many people complaining. Food prices, mobile ordering issues, Genie + / no more fast passes, no parades, lack of live entertainment, no face to face meet and greets. Just yesterday I talked to a family at Hollywood studios. I'm not going to judge a book by its cover, but if they were wealthy they didn't flaunt it. Honestly it was heartbreaking as they asked me about things like Genie + and if there's a way to do something like the fast passes without having to pay extra. If I would have had the $100 in cash that I always bring on trips on me I would probably just given it to them and told them to buy Genie + and try to have a great day.

It's simply NOT possible that guest satisfaction is high or "up". But again this is where they can work their numbers and say "well compared to our guess satisfaction scores right after reopening last year they are up." I would wager satisfaction numbers compared to the 2015-2019 average are down pretty decently.

WDW needs to course correct in the next few years or the damage could be decades long. Disney die hards are typically created when they're young. If you have a lot less young people going due to cost, etc their odds of growing up and turning their family into Disney die hards obviously goes down significantly.

I've rambled on long enough. Fire Bob.

Agree. There is no way satisfaction is up. That's just a lie he's selling to try and cover his butt. I have never seen as many complaints and unhappy people (online) as I have lately. There's a lot of people out there not feeling like they got a good return on their investment.

Take my nieces as a great example. They are 12 and 13 and find Disney boring. All they want to go to is Cedar Point. They went to Disney when they were 5 and 6 but have been brought up on parks like Cedar Point

Our two oldest nephews didn't like Disney. Now to be fair, they had never really "grown up" on Disney movies the way some kids do (like mine lol), so that attachment was already missing. Then, their first trip wasn't until they were 13 and 9. They were bored. Not enough thrill rides. Apparently the oldest told their Mom, "You kinda missed the boat on this one Mom." They definitely enjoyed their other vacations better (cruises, Caribbean trips, Europe) - said they got more for their money. And that was 7 years ago - I can't imagine what they'd think now!

Which is a good point - to create that Disney die-hard, that guest that will want to keep returning, what do you need? Do you think it has more to do with early exposure? Being raised on the movies so you have that connection? Or were some die hards made just because once upon a time, Disney really was all that?

 

[ChipnDale79]

Pushing olde bob to make more money will result in him making more cuts.

I dread to think of the state of the epcot work when hes done. I waited to see what deals disney was going offer the uk market. We have seen free dining, free spending money ect before. You know what we got? 14 days genie for the price of 10......Thats it.

So far they have pushed me to downgrade the hotel to all star, rework my dining plans, next i will look at offsite and less days in. Bravo Bob

price points over the past few years have pushed us from moderates to values, last trip at POP i was left wondering why i spent so much to stay at a value when i can pay less offsite for a much better room.

 

[OKW Lover]

Where as Disney doesn't seem to be investing - at least not in the theme parks.

Umm... Galaxy's Edge. Harmonious. Tron. Guardians of the Galaxy.

 

[AnnabelleTheTalkingTree]

I'd be careful with that assumption. Think of Genie + as a handful of Fast Passes as opposed to a I'll ride everything twice in one day kind of thing. For example, yesterday at Hollywood Studios we were looking at adding Genie+ around 1045 am. All the long wait rides didn't have Genie + availability till between 2-4 pm. Now sure you can grab one and try to move it forward, but no guarantees, and you can only hold one reservation at a time.

I have now done three trips during the pandemic. Two last year and the fall/November and the one that I'm on right now. I can say with certainty that this trip feels exceedingly more like a normal Disney trip than the two last year. However it's pretty obvious that they're trying to cut costs and fill in the revenue gap caused by the pandemic. Cast member overall quality is down a bit, too.

The way I'm looking at Chapek and the current state of the parks, is that this is simply a transition back to normal. I do believe that within 3 to 4 years there will be a new CEO, there will be many new announcements for park additions coming, and that some of these cost prohibitive things like Genie Plus, limited resort perks, and high resort per night prices will start to go down, maybe even significantly.

And what on earth do I have to do to get a regular straw and lid for my cup???

I'm not a fan of the Genie+ thing so I hope you're right. I *prefer* longer trips because it's supposed to be vacation, the lid thing is outrageous

I'll.admit.this gave me a not small amount of satisfaction. Looks good on them.



This!!!! When you have spent a lifetime (theirs) selling yourself as being totally different from the competition, as always going above and beyond, about caring for the guest,.claiming to be an industry leader etc... and then follow that up with recent actions. Nope. You start to lose your credibility and people start to see you for the greedy company you are.




I've said it before on another thread, but our June trip is our LAST trip. We are DONE giving Disney our money. At least until there's a major course correction on their part. And the only reason we're even taking the June trip is because it's DD's birthday gift from her grandfather. If it weren't for that, we'd have canceled. Neither DH or I have any excitement or interest in the trip - at least not the Disney portion. We'd far rather be going elsewhere.

So, as it is, the following changes have already been made:

- We cancelled our on site stay
- We will not be buying any Disney food, and that includes character meals - something we've always done
- We won't be paying for any extra experiences (again, something we've always done)
- We definitely will not be buying GP+/LL
- We currently have 4 days booked, but we may drop one of them and spending the money elsewhere

I'm actually glad to see this. We paid for a spring 2022 DVC rental before the genie+ announcement was made, and of course it's nonrefundable so we're going one way or the other. Had I known when we booked what I know now, I wouldn't have booked the trip. Given the situation, we are looking at this next trip as a test. If we don't like it, we are not going back until some major changes are made. And quite honestly, even if it's OKAY, I foresee us vacationing elsewhere come 2023. It just doesn't seem like you're getting your money's worth anymore, and there are plenty of other wonderful places to vacation. I love Disney but I'm not blind. That said, I feel like we are in the minority. Most people who are diehard Disney fans will talk a big game about not returning, but I don't know how many would actually follow through on that - which is why I say I wouldn't be surprised to see a lot of people shortening trips rather than just flat out not going.

 

[mshanson3121]

Umm... Galaxy's Edge. Harmonious. Tron. Guardians of the Galaxy.

With the exception of Harmonious, those are projects that were already underway well before Covid. I think the point is there is no NEW investment going on. And Harmonious is nothing but a replacement.

 

[BrianL]

With the exception of Harmonious, those are projects that were already underway well before Covid. I think the point is there is no NEW investment going on. And Harmonious is nothing but a replacement.

But to be fair, some of those projects aren't done yet - how often do you want them to be adding new rides? These were all long-term projects, and yeah they got delayed by COVID, but they are ongoing and proof that Disney is investing in new attractions for the parks. Now, I can agree that they are falling down on investing in general maintenance in certain areas for sure, but I agree with OKW Lover generally speaking.

 

[mshanson3121]

But to be fair, some of those projects aren't done yet - how often do you want them to be adding new rides? These were all long-term projects, and yeah they got delayed by COVID, but they are ongoing and proof that Disney is investing in new attractions for the parks. Now, I can agree that they are falling down on investing in general maintenance in certain areas for sure, but I agree with OKW Lover generally speaking.

I actually don't really have anything in this fight, I wasn't the one OKL was replying to. I was just pointing out that those things aren't new investments, which I'm pretty sure is what the original quote was referring to.

That said, I think perhaps investing in the parks could have looked like working harder to bring back certain experiences, improving certain things, maintenance and upgrades, and definitely improving their IT which would go a LONG way towards improving guest satisfaction. But then again, if they can just lie through their teeth and tell everyone guests are satisfied even when they aren't... what's the point.

 

[ChipnDale79]

I actually don't really have anything in this fight, I wasn't the one OKL was replying to. I was just pointing out that those things aren't new investments, which I'm pretty sure is what the original quote was referring to.

That said, I think perhaps investing in the parks could have looked like working harder to bring back certain experiences, improving certain things, maintenance and upgrades, and definitely improving their IT which would go a LONG way towards improving guest satisfaction. But then again, if they can just lie through their teeth and tell everyone guests are satisfied even when they aren't... what's the point.

i think they should invest in bringing the trams back.

I think its things like this, that give disney a black eye. Multi Billion dollar corporation, and they cant provide their guests (that are paying them thousands) with parking lot trams.

 

[Liquidice]

Umm... Galaxy's Edge. Harmonious. Tron. Guardians of the Galaxy.

Those are all projects that were started under Bob Iger - since then, Disney has considerably cut back the Epcot renovation and are spending less on investment at the parks. $500M less in 2021 after they already cut back significantly for 2020 due to the pandemic.

 

[mshanson3121]

i think they should invest in bringing the trams back.

I think its things like this, that give disney a black eye. Multi Billion dollar corporation, and they cant provide their guests (that are paying them thousands) with parking lot trams.

A slight derail, but how far of a walk is it if you're towards the back of say the MK or EP parking lot?

 

[ChipnDale79]

A slight derail, but how far of a walk is it if you're towards the back of say the MK or EP parking lot?

not sure...but i do know it was a little under a mile to the front gate at AK (walking past premium parking). i know its not a lot, on top of what you're already walking at disney, it can add up.

 

[OKW Lover]

A slight derail, but how far of a walk is it if you're towards the back of say the MK or EP parking lot?

At Epcot, about 1/2 mile I'd guess. By comparison, the loop around World Showcase is ~1 mile.

 

[Liquidice]

Just to jump on the thought that Disney is continuing to invest - this is the lowest investment year by dollar since 2013, not accounting for inflation...
For theme parks & resorts only (I previously had an error in my first post which was for all capital expenditures, not just parks & resorts), capital expenditures by year:

• 2021: $2.27 billion
• 2020: $2.90 billion
• 2019: $4.14 billion
• 2018: $3.88 billion
• 2017: $3.19 billion
• 2016: $4.22 billion
• 2015: $3.60 billion
• 2014: $2.69 billion
• 2013: $2.11 billion

With inflation, $2.11B in 2013 is worth about $2.5B today, if you account for inflation - you have to go back to 2010 to see a smaller capital expenditure number ($1.53B in 2010, or $1.9B in today's dollars) - likely due to economic issues brought about by the housing bubble in 2008. Disney is not in that same situation now though, there has been a travel boom and pent up demand...

 

[Devil13]

I see this as the beginning of the end. Things will get worse before they get better.

I'm on the edge of dumping my family's 4, out of state, APs and all upcoming trips to shift to Universal.

 

[Fauntleroy]

They definitely are just another company. But they sell themselves as more than just another company. A lot of the backlash comes from that dishonesty.

I’m really not sure that’s true today. Once you strip away the fluff, I think their positioning is more: “Disney: home to amazing entertainment, and content”. The fact, that the company was once a national/International treasure, custodian to Walt’s legacy, and all our magical childhood dreams is ancillary IMHO. Part of the corporate history to be sure- but ultimately like how BMW once focused on plane engines.

Personally, though I lament the passing of the company that was- it does not prevent me from being a (mostly enthusiastic) consumer of the company that is. I just guide my interactions w/DIS as I would with JPM, AAPL, AMZN, NKE, etc.

 

[ChipnDale79]

I see this as the beginning of the end. Things will get worse before they get better.

I'm on the edge of dumping my family's 4, out of state, APs and all upcoming trips to shift to Universal.

i dont think i see it as the beginning of the end, i think Disney would dump the CEO and get back to basics if things got bad.

Then again, there isn't a disney family member to raise their hand and say things arent going right. Roy E. Disney did that in the past.

 

[Liquidice]

i dont think i see it as the beginning of the end, i think Disney would dump the CEO and get back to basics if things got bad.

Then again, there isn't a disney family member to raise their hand and say things arent going right. Roy E. Disney did that in the past.

If only Roy E. Disney were still alive today, maybe he'd ask Eisner to come back

But seriously, it is too bad nobody like Roy E. Disney is here to keep Disney the company in check. Abigail Disney is alive, but she isn't involved with the company at all to be able to influence any kind of change.