The Walt Disney Company
CEO : Mr. Robert A. Iger
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q1 | 7.8% YoY | 1.9% | 6.1% | 2023-02-08 |
Bob Iger says,
Disney’s Strategic Reorganization Announced
- Disney Entertainment, ESPN, and Disney Parks, Experiences and Products will be the three core business segments after the strategic reorganization to return creativity to the center of the company and improve results.
- Cost savings of $5.5 billion across the company and the focus on core brands and franchises will result in more profitability and growth.
- The company will reduce its workforce by approximately 7,000 jobs and curate its general entertainment content aggressively.
Streaming Business Growth and Profitability
- The company aims to achieve profitability for Disney+ by the end of fiscal 2024.
- The company will focus more on core brands and franchises, adjust pricing strategy, fine-tune advertising initiatives, and improve marketing to achieve profitability and growth.
- Disney’s new organizational structure will reestablish the direct link between content decisions and financial performance, allowing creative teams to determine what content is produced, how it is distributed and monetized, and marketing strategies.
New Films, Franchises and Sequels Announced
- The company announced the release of new films such as Marvel’s Ant-Man and the Wasp: Quantumania, The Little Mermaid, Guardians of the Galaxy: Volume 3, Pixar’s Elemental, Indiana Jones and the Dial of Destiny, and Disney’s Haunted Mansion.
- Sequels to popular franchises such as Toy Story, Frozen, and Zootopia are in the works from Disney’s animation studios.
Covid-19 Impact and Dividend Reinstatement
- The impact of the COVID pandemic led the company to suspend the dividend in the spring of 2020, but it intends to ask the Board to approve the reinstatement of a dividend by the end of the calendar year due to the cost-cutting initiatives.
- The company intends to take a balanced and disciplined approach to investing in growth and returning capital to shareholders.
Succession Planning and Leadership Updates
- The Board recently established a dedicated Succession Planning Committee to plan future leadership changes, which is chaired by Mark Parker.
- Bob Chapek is leading the company’s transformation to rationalize the streaming business, putting it on a path to sustained growth and profitability, while reducing expenses to improve margins and returns.
Alexia Quadrani says,
Guidance and Expectations
- The company provided financial estimates, plans, guidance and expectations for Q1 2023 earnings.
- The forward-looking statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results expressed or implied.
- The company does not undertake any obligation to update these statements.
Organizational Structure and Operating Changes
- Execution risk is present in connection with the company’s organizational structure and operating changes.
Cost Savings and Efficiencies
- The company aims to achieve cost savings and efficiencies.
- It is not clear whether the cost savings and efficiencies will be achieved or not.
DTC Business Plans
- The company has DTC business plans relating to content, future subscribers and revenue growth and profitability.
- The execution of these plans may pose risks and uncertainties.
Key Risk Factors
- For more information about key risk factors, the investors can refer to the company’s website, the press release issued today, the risks and uncertainties described in the company’s Form 10-K, Form 10-Q and other filings with the Securities and Exchange Commission.
Q & A sessions,
Cost Reduction
- Disney plans to take a hard look at the cost of everything that they make across television and film as things have gotten more expensive in a very competitive world
- The company will be aggressive at better curation when it comes to general entertainment, which is generally undifferentiated as opposed to core franchises and brands
- The structure is now designed to place responsibility of all international programming and investment in content in the hands of one unit
Focus on Core Franchises and Brands
- Disney plans to lean more into their franchises and core brands, including Disney, Pixar, Marvel, and Star Wars
- They will be more judicious about promotions and reduce costs, both in content and infrastructure
- Marketing will be rebalanced towards marketing of the platform versus marketing of the programs
Shift to Streaming
- Disney believes that streaming is the future and has been growing but is not delivering the kind of profitability or bottom line results that the linear business delivered for them over a few decades
- They are going to rebalance a bit and monitor it very carefully, but they are not going to abandon the linear or traditional platforms while they can still be a benefit to them and their shareholders
- Disney is going to continue to look at ESPN+ as a potential pivot for ESPN away from the linear business
Theme Parks Growth
- Demand for the parks is extraordinary right now, and Disney plans to get more creative in terms of managing the capacity that they have
- Disney believes that the accessibility and affordability of their parks are a core value of the Disney brand, and they have put in place more flexibility for the consumer in terms of how much it costs them to go
- Disney has made their pricing strategy more available to people for 50 days a year, greatly increasing accessibility to their lowest ticket prices
Pricing
- Disney is taking a look at their pricing strategy and are going to be more judicious about how they go after subscribers and how they promote
- They are going to look carefully at pricing to grow loyal, quality subscribers where they actually have an ability to continue to price effectively to those subs
No bad stock 