Attendance at Disney's domestic theme parks was down 1% in the second fiscal quarter, but revenue was still up thanks to guest spending.
On the company's fiscal Q2 earnings call Wednesday, Disney CEO Josh D'Amaro said Disney's Experiences segment saw strong revenue growth of 7% in the quarter, totaling $9.49 billion, with segment operating income up 5% to $2.62 billion. Both metrics were Q2 records for the company.
While the parks have had headwinds in terms of attendance recently, largely due to international visitation, D'Amaro expects attendance to improve in the third fiscal quarter.
CFO Hugh Johnston said excluding the impact of reduced international visitation, domestic park attendance would have grown in the second quarter. Guest spending was up "a little stronger than expected" across multiple categories, including admissions, food and beverage and merchandise. Forward bookings for the back half of the year are encouraging, he noted.
Johnston also addressed the cost of oil and gas.
"We haven't seen any change in consumer behavior from elevated gas prices thus far and aren't currently seeing a material impact on the remainder of the fiscal year," he said.
However, impacts could come, he said, if current fuel prices rise further.
"If that possibility were to occur, each business has levers in place to make adjustments in order to help offset those kinds of macro pressures," Johnston said.
D'Amaro takes the helm
Wednesday's call marked D'Amaro's first as CEO. He thanked his predecessor, Bob Iger, for building a strong foundation and momentum within the company. He also said he was honored to be its leader.
"This is one of the world's truly great companies built over more than a century through powerful storytelling, constant innovation and a singular ability to forge deep, emotional connections with audiences all around the world," D'Amaro said. "I step into this role with genuine appreciation, a strong sense of responsibility and real optimism about what lies ahead."
One of his main priorities as CEO will be creating solid intellectual property that can be leveraged throughout the company, including in its Experiences division, which includes Disney Cruise Line and theme parks.
D'Amaro also said the company will increasingly look to link its various experiences via streaming platform Disney+.
"I think we have a real opportunity to deepen our direct relationships with our fans, and we can do this by creating a much more connected Disney experience," he said. "And we'll do that across streaming and sports and games and experiences, and we'll put Disney+ right at the middle, playing an increasingly central role."
The company is also in the midst of injecting a large amount of capital into its Experiences division.
Some has already come to fruition with the launch of the Disney Adventure, homeported in Singapore, and the recent opening of the World of Frozen at Disneyland Paris.
"These are meaningful milestones that extend the reach of our brands to new markets and new fans around the world," he said. "The strong demand that we're seeing for these attractions reinforces our confidence in the long-term opportunity across our portfolio of experiential assets: parks, cruise line and immersive experiences alike."
D'Amaro said investing in capital projects is important to Disney's strategy to grow Experiences. Much of the projects planned are designed to expand capacity for both theme parks and Disney Cruise Line, as well.
He also called out some "capital-light" models of development Disney is deploying, like its collaboration with the Oriental Land Company to launch cruises in Japan by 2029, and its work with Miral to develop Disneyland Abu Dhabi.