In a recent unveiling of its third-quarter financial results, The Walt Disney Company proudly announced that its streaming service has turned profitable for the first time. However, the theme park division didn’t fare as well, missing the mark on sales and profit expectations. Disney’s CFO, Hugh Johnston, took a moment with Yahoo Finance Executive Editor Brian Sozzi to discuss the results and shed some light on the future.
Despite the current setbacks at the theme parks, Johnston remains optimistic. He believes that the parks will face a few more quarters of challenges but anticipates a strong recovery. He emphasized that Disney’s “creative engine is really getting back on track,” with particular mention of their recent cinematic triumphs rejuvenating the box office.
Addressing consumer behavior, Johnston noted a shift toward more frugal spending patterns. “We see consumers being more cautious, though I wouldn’t categorize their behavior as recessionary,” he observed. This frugality has led Disney to tighten its cost management and offer more value-driven options to consumers, ensuring affordability without hurting the company’s financial standing.
Johnston praised CEO Bob Iger’s strategic pivots, particularly in the realm of content quality. He mentioned that Disney’s initial streaming launch saw a vigorous push for quantity, potentially at the expense of quality. Iger’s recent moves to delay or scrap underperforming projects have bolstered Disney’s content credibility, which Johnston believes is vital for sustaining success.
With the strength of Disney’s intellectual properties and the resilient nature of vacation spending, Johnston remains confident. He pointed out that such factors usually allow Disney to recover faster than others during economic downturns.
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Source: Seana Smith
