Bob Iger Outlines His Plan for Disney. Then More Bad News Hit.

Disney (ticker: DIS) said the park will be temporarily closed from Tuesday “in order to follow the requirement of pandemic prevention and control.” It only reopened last week after a 25-day shutdown.

However, the company’s shopping and dining district Disneytown and its two resort hotels will remain open. That offers some relief for Disney but also suggests Chinese authorities are keen to avoid a repeat of Shanghai’s full lockdown earlier this year, which lasted two months.

The media and entertainment conglomerate’s parks business has rebounded strongly in 2022, after two years beset with Covid-19 and travel restrictions. Disney’s international parks business has relied on Disneyland Paris to provide growth–through higher visitor numbers and increased ticket prices. But that growth has been partially offset by the Shanghai resort.

Domestic parks brought in $5 billion of revenue in the fiscal fourth quarter ending Oct.1, a 44% increase, while international parks generated $1.1 billion, a 55% jump. The comparable period was impacted by Covid-19 measures.

Granted, Iger has bigger fish to fry, namely the company’s streaming operations, which posted a $1.47 billion loss in the fourth quarter. The returning CEO told employees in a town hall Monday that making the streaming business, which includes Disney+, profitable was one of his top priorities. The company will start chasing profitability, rather than subscribers, he added.

However, Disney Parks margins took a hit in the fourth quarter, driven by the impact of Hurricane Ian and the downbeat performance of international parks, Chief Financial Officer Christine McCarthy said.

For those hoping to see the Shanghai resort positively contributing to earnings again, the wait looks set to go on.

Write to Callum Keown at callum.keown@barrons.com