Walt Disney said Thursday it’s rolling out one of the biggest promotions ever at its theme parks in a bid to bolster revenue amid a massive economic slowdown.
Chief exec Robert Iger revealed a new “four-plus-three” package for the first half of 2009 that lets people who book four nights stay for seven. The Mouse House will throw in a $200 gift card for those who book soon.
Analyst Richard Greenfield at Pali Research said in a note that Disney “has not offered this level of discounts in recent memory.”
News came as Disney announced that profits last quarter dipped 13% to $760 million. Revenue rose 5% to $9.45 billion.
Earnings would have been higher excluding a bad-debt charge of $91 million stemming from Lehman Brothers’ bankruptcy and several other special items.
The theme park biz, which becomes a Wall Street focus in any recession, saw a 7% bump in revenue to $2.9 billion.
Operating profit eased 4% to $412 million for the three months ended in September.
Iger said during a conference call to discuss the financial results that bookings held steady during most of fiscal 2008 but fell off significantly during the last month.
Disney’s fiscal year ends in September.
“Consumer confidence is down at the lowest level in three decades. Even the best product out there is feeling the effect,” he said.
But he noted that, having weathered the aftermath of 9/11, the conglom has some real experience under its belt and is able to dial costs down along with attendance. The parks and resorts also have many more value-priced rooms than they did during the last downturn.
“Not only have we gone through this before, but we’ve gotten better at it,” Iger said.
Media networks, led by ESPN and ABC, held firm as revenue grew 4% to $4.2 billion. Profit was flat at $1.06 billion.
Iger noted that during what’s become a wicked advertising slump, Disney owns only 10 television stations. The company’s overall exposure to the ad market is just under 20% — not insignificant, but less than some of its peers.
Earnings rose 11% at the cable nets, while the broadcasting loss widened to $150 million as a result of weakness at the ABC network and advertising woes at the stations.
The consumer products biz rocked. Revenue surged 41% to $812 million, led by “Hannah Montana” and “High School Musical” merchandise.
Profit jumped 14% to $176 million. Execs warned that demand could weaken in 2009 depending on just how slow the economic slowdown proves to be.
Studio entertainment, ironically considered by many the most recession-proof showbiz sector, was the weakest link in Disney’s quarter. Revenue slid 5% to $1.45 billion. Operating income plunged 42% to $98 million.
The company cited a decrease in domestic theatrical distribution reflecting weaker-performing titles — “Swing Vote” and “Miracle at St. Anna” — and higher marketing expenses for releases after the end of the quarter, including “Beverly Hills Chihuahua.”
Iger also revealed that the studio sold 2 million units of its direct-to-DVD pic “Tinkerbell” in the U.S. in its first seven days of release. He said there’s been no sign of softening in DVD sales. Disney has fewer out than its competitors, he said, and they all have the Disney name.
For the full year, Disney reported revenue of $37.8 billion, up from $35.5 billion the year before. Net income dipped to $4.4 billion from $4.7 billion.
The earnings were announced after the market closed. Disney shares dipped 1.42% to $22.81on Thursday in a selloff of the broader market.