During The Walt Disney Company’s quarterly earnings call on November 12, Walt Disney Company CEO Bob Chapek and CFO Christine McCarthy addressed the numerous challenges the company has faced amid the ongoing pandemic this year.
The company has found itself facing its first annual loss since 1980 — it is also worth noting that Disney hasn’t even suffered a back-to-back quarterly loss since 1996.
MarketWatch shared these details, including information about historic losses, following the earnings call:
For the full fiscal year, Disney recorded a GAAP net loss of $2.83 billion. Disney has not reported an annual GAAP loss in FactSet records that date to 1980, and has not reported two consecutive quarterly losses on records dating back to 1996.
“It’s been a year unlike any other in our lifetimes, and certainly in the history of the Walt Disney Co.,” Chief Executive Bob Chapek said in a conference call Thursday afternoon.
One interesting thing to consider is that Walt Disney Home Video launched in 1980, taking Walt Disney Studios’ viewers out of the theater and into their own homes to experience Disney movie magic for the first time. This transition away from movie theaters is not dissimilar to the rise of Disney+, which occurred over the course of the past year.
Granted, there are differences between these two situations — 1980 wasn’t the middle of a pandemic that had completely shut down the movie theater industry, certainly. Nonetheless, it is worth noting that both of Disney’s losses in the past half-century have been in years when they attempted to seriously diverge from theatrical releases.
The pandemic impact.
As an entertainment giant, Disney has been immensely impacted by the COVID-19 pandemic. The corporation’s six global theme parks were shut down for months (Disneyland Resort has yet to reopen), all four Disney Cruise Line ships have been unable to sail, and movie and television production was on hold for quite some time.
Market Watch also shared exactly numbers regarding Disney’s pandemic losses, particularly — and unsurprisingly — in Josh D’Amaro’s Parks, Experiences and Products segment:
Disney disclosed Thursday that the pandemic cost it $7.4 billion in operating income in the fiscal year, with almost all of it — $6.9 billion — coming from the theme parks and experiences division.
Other areas struggled, too. Even the direct-to-consumer division (including Disney+, Hulu, and ESPN+ streaming platforms), which was called a “bright spot” amid the pandemic, has lost billions of dollars. Disney+ is not expected to actually begin turning a profit for several years, in spite of its apparent success.
Is there hope for the future?
Never known for giving up hope, Walt Disney Company executives spoke of the future with a positive outlook.
CEO Chapek stated:
We haven’t just persevered during these tough times, we’ve also taken a number of deliberate steps [and we] position our company for greater long-term growth…
The impressive resilience that [we have] demonstrated, while looking past today’s challenges, and set the stage for an even brighter future and is a direct reflection of our outstanding team. They’ve done and continue to do an admirable job balancing the needs of our Cast, our shareholders, and our Guests, of course.”
Furthermore, the company also had some good news as Cast Members, theme park Guests, and Disney fans the world over look to the future.
Walt Disney World in Florida, Shanghai Disneyland, and Tokyo Disney Resort were all net positive financially in the fourth quarter. This is major news since nobody know exactly what would happen when these parks began their phased reopening processes amid the virus spread earlier this year.
Finally, the maiden voyage dates of the Disney Wish ship’s two Triton Class sister vessels were announced! One will set sail in 2024 and the other in 2025. The Wish itself is still set for a Summer 2022 maiden voyage, following pandemic-related construction delays in Germany.
It sounds like, even after its first annual loss in 40 years, there just might be a great, big beautiful tomorrow for Disney.