Do Disney’s Numbers Really Reveal A Strong Domestic Economy?


You might think that in a weak economy, consumers would cut back on things like trips to Disney’s theme parks.  But their theme park revenues and earnings for the quarter ended March 31, released yesterday, were impressive.  Revenues were up 11% and operating income 33% (DIS FY 2Q Earnings Release).

A couple caveats though.  The press release notes: “Higher attendance was primarily driven by the benefit of the shift of the Easter holiday”. 

The other caveat was that the number of foreign visitors to Disney’s US theme parks was up 25% compared to the year ago period, the Wall Street Journal cited CEO Bob Iger as saying (Disney Parks Flourish Despite Economic Drought” (subscription required), The Wall Street Journal, Wednesday May 7, B1).

The latter really gets me to thinking.  Disney’s report is supposed to be a sign that the domestic economy isn’t really as weak as some people are saying.  But how much of Disney’s domestic theme park strength was driven by a weak dollar and foreign visitors?  If that’s what’s driving it, it is consistent with a weak US economy.

Disclosure: Top Gun has no position in Disney (DIS) shares.

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