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

[PCFriar80]

I am really disappointed in Disney stock right now. I'm still on the plus side but even after the decline a share is still 3 times the price of Comcast and Disney only pays $.72 Dividend/ Yield while Comcast pays $1.82. As a whole, what I do own in stocks really sucks right now including Disney. My only saving grace is my Dogecoin and Shiba Inu.

Disney suspended the semi-annual dividend payment of $.88 after the 1/20/20 payout. Not sure where you're getting the $.72 dividend yield from? Comments by the CEO from a 10/5/21 Investor conference:

"According to Disney CEO Bob Chapek, dividends won't be returning anytime soon. Here is what the CEO said at an investor conference recently:

I think what we're going to do is, number one, our clear priority, and the Board agrees with management, that the clear priority is funding our new growth businesses that we've got. But once we get to a point where, again, our cash flow is funding that, handling some of the debt that we've got, then everyone agrees that it would be a great thing to reinstate that dividend and do share buybacks. But that's sort of in the distant future. "

 

[Jimmy Mouse]

Disney suspended the semi-annual dividend payment of $.88 after the 1/20/20 payout. Not sure where you're getting the $.72 dividend yield from? Comments by the CEO from a 10/5/21 Investor conference:

"According to Disney CEO Bob Chapek, dividends won't be returning anytime soon. Here is what the CEO said at an investor conference recently:

I just looked and I haven’t received any in 2021 at all. I didn’t look at 2020. I didn’t realize they stopped. I did a quick look to get that figure, it must have not been updated or a glitch.

 

[Liquidice]

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.

 

[asculthorp]

Am I the only one who likes this? It's nice to see a CEO tell it to your face that guests are just a $. People just need to accept this is what Disney is now.

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.

 

[Mousey0324]

Stock has performed horribly. I bought it a while ago and dumped it yesterday. Minimal gains. There are far better investment opportunities out there. This isn’t one of them.

 

[JoeA]

I have said this many times before, but Disney sure feels like the North Pole when Jack Frost became Santa.

...which is streaming now on Disney + so be sure to have all of your friends subscribe! Refer 10 friends and family and receive a free pen with a picture of Mickey Mouse! This post was brought to you by Starbucks, when visiting the Disney Parks be sure to order an extra Grande vanilla mocha latte.

 

[ChipnDale79]

I have said this many times before, but Disney sure feels like the North Pole when Jack Frost became Santa.

...which is streaming now on Disney + so be sure to have all of your friends subscribe! Refer 10 friends and family and receive a free pen with a picture of Mickey Mouse! This post was brought to you by Starbucks, when visiting the Disney Parks be sure to order an extra Grande vanilla mocha latte.

I think the Jack Frost comments ive seen from a few people kind of hits the nail on the head with how things are now. Look, we all know Disney has always been a business and have always been about getting you to pay as much as they can. But i think the tactics have now gotten way out of hand, and it reeks of Jacks Frost.

 

[RamblingMad]

Not surprised.

Disney+ new content is pretty limited compared to what you get from HULU, HBO Max, and Netflix. If this is their new growth engine, they need to invest in new content for it.

 

[hou2009]

Not surprised.

Disney+ new content is pretty limited compared to what you get from HULU, HBO Max, and Netflix. If this is their new growth engine, they need to invest in new content for it.

I agree with you, but I think Disney's pretty limited in what they can do, because it's Disney. Disney doesn't really present real-world issues or conflict or characters. The fiction shows I watch on the other services are about grown ups doing grown up things. Having affairs, having sex, crime, etc. Even the comedies I enjoy on the other services are rated R or MA. I think Disney's brand offers a lot of programming, excellent programming, but it's definitely boxed in.

 

[Chumpieboy]

Just for comparison's sake ... here is what Amazon's new CEO, Andy Jassy said during their most recent quarterly earnings call ...



Source: https://www.inc.com/minda-zetlin/amazon-third-quarter-profits-down-andy-jassey-customers.html

In other words, they are sacrificing profits to try to help ensure customers get their orders on time and support sellers on the Amazon marketplace.

He also said ...



Just contrasting with what Bob Chapek said during Disney's quarterly earnings. I've seen a lot of people say Disney is a company and that they need to make money - and increasing prices and creating less value for customers by upcharging is A-OK because Disney is a company and all companies need to do this to make money ... yet there are companies who value the customer experience - even at the expense of profits, and aren't going out of business.

They're in different businesses, so it isn't apples to apples, but both are customer service companies first. The Disney of old actually reminds me a lot of what Amazon strives to be, despite all of the bad press Amazon gets.

Anyway, my point is, Disney doesn't need to just think of customers as dollar signs to be a profitable and successful company. There are plenty of examples of companies that are successful without making their customers continually feel like crap.

It's pretty bad when Amazon looks good compared to Disney LOL

 

[Scalemaster34]

It's pretty bad when Amazon looks good compared to Disney LOL

Yeah a big part of their sucess is based on the good natured feelings people have for the CEO.... can you see Chapek, hosting The Wonderful World of Disney on Sunday nights?

 

[Scalemaster34]

It's pretty bad when Amazon looks good compared to Disney LOL

Yeah a big part of their sucess is based on the good natured feelings people have for the CEO.... can you see Chapek, hosting The Wonderful World of Disney on Sunday nights?

 

[AnnabelleTheTalkingTree]

While all that is true, this is what Disney is now. Nothing is going to change til people stop going.

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.

 

[Donald-Duck-QUACK-TASTIC]

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'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???

 

[butterscotchcollins]

Disney has always been good at getting you to part with your money and making you happy about it. Now they’re good at getting you to part with your money but you’re UNhappy about it. That’s the difference. In the Iger era guests had a baseline of enjoyment with many upgrade opportunities to make it even more enjoyable - the question is, do all guests now have the same baseline of enjoyment? I would argue yes but Chapek is doing a worse job on selling those upgrade opportunities.

Genie+ isn’t necessary, staying onsite isn’t necessary, the extended hours for Deluxe guests aren’t enough to justify the extra cost above simply doing a hard-ticket event that gets you more park time and more perks, there is no dining plan option to drive $ - he’s missing key opportunities for those guest add-ons, so while spend per guest is up and revenue is up it is certainly far from optimized.

 

[RamblinWreck]

Just for comparison's sake ... here is what Amazon's new CEO, Andy Jassy said during their most recent quarterly earnings call ...



Source: https://www.inc.com/minda-zetlin/amazon-third-quarter-profits-down-andy-jassey-customers.html

In other words, they are sacrificing profits to try to help ensure customers get their orders on time and support sellers on the Amazon marketplace.

He also said ...



Just contrasting with what Bob Chapek said during Disney's quarterly earnings. I've seen a lot of people say Disney is a company and that they need to make money - and increasing prices and creating less value for customers by upcharging is A-OK because Disney is a company and all companies need to do this to make money ... yet there are companies who value the customer experience - even at the expense of profits, and aren't going out of business.

They're in different businesses, so it isn't apples to apples, but both are customer service companies first. The Disney of old actually reminds me a lot of what Amazon strives to be, despite all of the bad press Amazon gets.

Anyway, my point is, Disney doesn't need to just think of customers as dollar signs to be a profitable and successful company. There are plenty of examples of companies that are successful without making their customers continually feel like crap.

They’re both doing the same thing, as in they’re both trying to maximize profits.

One is just taking a very short-sighted approach to it. Which is bad news for Disney going forward.

 

[Donald-Duck-QUACK-TASTIC]

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.

 

[Liquidice]

They’re both doing the same thing, as in they’re both trying to maximize profits.

One is just taking a very short-sighted approach to it. Which is bad news for Disney going forward.

Oh I agree, it isn't like Amazon is a charity - but they're willing to spend money to make money in the long run. Where as Disney doesn't seem to be investing - at least not in the theme parks. They are investing in Disney+ I guess?

There is a key quote in that article ... "Whenever I hear someone say that a CEO's first job is to maximize returns for shareholders, I always want to ask--which shareholders do you mean? Those who plan to hold the stock for a month or those who plan to hold it for a decade?"

Disney currently seems to be aiming to cut costs to create short term gains - eventually you will run out of things to cut to maximize profits or your customers revolt when you go too far, what happens then? I wonder if one of these things are actually happening...

1. Chapek isn't in it for the long term, his aim is to create a bunch of good quarters short term so he can find his next job. This seems unlikely since Chapek has been at Disney for a long time.

2. Chapek has no idea what he is doing - and has no vision / ability to look further down the road - I highly doubt this, Iger and the board wouldn't have put him in this role otherwise.

3. Chapek is aiming to sell the theme park business in 5-10 years and replace it with a fully virtual theme park experience as part of Disney's metaverse that seems to be the new buzzword lately. This seems crazy - but maybe there is something to it?

 

[Liquidice]

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.

I definitely agree that Disney fans are made when they're young and when you start to price out your customers, families won't raise their children as Disney fans. You might instead remember your childhood memories spent at Universal Studios or maybe your local Six Flags instead. It is another short term gains at the expense of long term customer base that I'm surprised seems to be the direction.

 

[Jrb1979]

I definitely agree that Disney fans are made when they're young and when you start to price out your customers, families won't raise their children as Disney fans. You might instead remember your childhood memories spent at Universal Studios or maybe your local Six Flags instead. It is another short term gains at the expense of long term customer base that I'm surprised seems to be the direction.

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