Walt Disney Co. on Tuesday reported that the financial impact due to its theme parks being closed amid the COVID-19 pandemic resulting in a fiscal quarter loss of $3.5 billion.
“Parks, Experiences and Products revenues for the quarter decreased 85 percent to $1.0 billion, and segment operating results decreased $3.7 billion to a loss of $2.0 billion,” according to the Tuesday fiscal report. “Lower operating results for the quarter were due to decreases at both the domestic and international parks and experiences businesses and to a lesser extent, at our merchandise licensing and retail businesses.”
Overall sales for the company fell 42% to $11.8 billion, missing analyst expectations of $12.39 billion.
Before the pandemic struck, Disney’s parks, experiences and products segment had been a profit engine for the company, comprising nearly half of 2019’s annual operating profit.
Disney has been opening its parks back up around the globe, but most were still shuttered during the company’s fiscal third quarter.
In May, it opened Disney Springs, a complex of shops, restaurants and entertainment venues in Lake Buena Vista, Florida. Hong Kong Disneyland reopened in June, but closed again after a month due to an outbreak in the city. It reopened Walt Disney World’s Magic Kingdom and Animal Kingdom, Epcot and Disney’s Hollywood Studios in Orlando, Florida, in July.
Disney CFO Christine McCarthy noted that the surge in Florida virus cases hurt airline travel, which did impact the company’s initial park projections. Nonetheless, the company is seeing a “positive net contribution” from Disney World being reopened at reduced capacity, she noted.
Disney CEO Bob Chapek again noted that a park location would not be in operation if it would lose money. And he noted the company was confident that the number of park visitors would continue to increase as people regained confidence.
Disney did report positive returns on its new streaming service, Disney+, which had nearly 60 million subscribers at the end of June, according to the company. The service debuted in November in the U.S. and rolled out to the UK and other parts of Europe last month. Disney Plus, Hulu and ESPN Plus combined reached over 100 million subscribers, the company said.