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Strong Parks & Resorts to Benefit Disney (DIS) Q2 Earnings


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Walt Disney DIS is slated to report second-quarter fiscal 2018 results on May 8.

We expect robust top-line and operating income growth at the Parks & Resorts segment, which has now been restructured as Parks, Experiences and Consumer Products segment, to drive Disney's overall results in the to-be reported quarter.

Notably, the Parks & Resorts segment revenues and operating income have beaten the Zacks Consensus Estimate in the trailing four quarters.

In the last reported quarter, Parks & Resorts segment revenues (33.6% of first-quarter revenues) increased 13% year over year to $5.15 billion. The segment's operating income surged 21% to $1.35 billion, driven by growth at the company's domestic parks and resorts, cruise line and vacation club businesses.

Click here to know how the company's overall Q2 performance is likely to be.

Strong Visitor Growth to Aid Top Line

The media giant's continuing investment on Parks & Resorts is reaping benefits. Disney's strategy of better-load balancing of attendance throughout the year is driving up the number of visitor growth rate.

The segment continues to show robust performances both domestically and internationally owing to rise in customer spending, higher ticket prices and attendance.

At first-quarter conference call, management stated that domestic resort reservations for the second quarter were up 3% year over year, while booked rates rose 13%. The segment top-line is expected to benefit from the one-week of Easter holidays that fell in the last quarter.

The Walt Disney Company Revenue (TTM)

The Walt Disney Company Revenue (TTM) | The Walt Disney Company Quote

Moreover, Disneyland Paris will continue to benefit from the resort's 25th anniversary celebration, which is likely to drive higher attendance, guest spending and hotel occupancy.

The Zacks Consensus Estimate for second-quarter Parks & Resorts revenues stands at $4.68 billion, reflecting almost 9% year-over-year growth.

Moreover, Disney estimated that the Easter Holiday timings would benefit Parks & Resorts operating income by almost $35 million, offset by roughly $20 million negative impact from a 14-day dry-dock of the Disney Magic.

The consensus mark for second-quarter Parks & Resorts operating income stands at $872 million, reflecting 16.3% year-over-year growth.

Zacks Rank & Stocks to Consider

Currently, Disney carries a Zacks Rank #3 (Hold).

Casa Systems CASA , Ralph Lauren RL and Michael Kors KORS are stocks worth considering in the broader Consumer Discretionary sector. All the three stocks carry Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Casa Systems is set to report first-quarter 2018 results on May 10. Ralph Lauren is set to report fourth-quarter 2018 results on May 23. Michael Kors is expected to report fourth-quarter 2018 results on May 30.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: DIS , RL , KORS , CASA


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