Virus cost Disney more than a billion in Q2

The financial impact of coronavirus-related disruptions on
Walt Disney Co. was some $1.4 billion in its fiscal second quarter. Most of that
lost money — $1 billion — came from Disney’s Parks, Experiences and Products
division, CFO Christine McCarthy said on the company’s earnings call Tuesday.

With all theme parks closed worldwide, the parks division’s
revenue decreased 10% to $5.5 billion in the quarter. Operating income
decreased 58% to $639 million.

The closures began with parks in Asia in January. In the U.S.,
Disneyland in California closed March 14, followed by Walt Disney World on
March 16.

While CEO Bob Chapek said it’s too soon to tell when the
company will resume normal operations, including all theme parks and Disney
Cruise Line, he said Shanghai Disneyland will reopen May 11.

“We will take a phased approach with limits on attendance,
using an advanced reservation and entry system, controlled guest density using
social distancing, and strict government-required health and prevention
procedures,” Chapek said. “These include the use of masks, temperature
screenings and other contact tracing, and early detection systems.”

He later clarified that masks will be required for all
employees and guests. The only ones not required to wear a mask will be “face
characters,” or cast members in costumes that allow guests to see their faces. Those
characters will only be seen from a distance from crowds.

Masks will not be required in restaurants and other dining

Typically, Shanghai Disneyland’s capacity is around 80,000
guests per day, Chapek said. The government has limited its capacity to roughly
30% of that number, or around 24,000 guests per day. 

According to Chapek, Disney will open with far fewer than
24,000 guests per day to avoid lines entering or within the park as the company
gets used to new operating procedures. He estimated Disney will ramp up
capacity to 30% figure within a few weeks of opening.

To ensure crowds are kept to low numbers, he said Disney
will use dated tickets in Shanghai, but he said that Disney might not use the
same strategy when domestic parks reopen.

“While it’s too early to predict when we’ll be able to begin
resuming all of our operations, we are evaluating a number of different
scenarios to ensure a cautious, sensible and deliberate approach to the eventual
reopening of our parks,” Chapek said.

Disney’s companywide net income fell 91% to $475 million.
Revenue increased 21% to $18.01 billion.

Executive chairman Bob Iger was positive about the future,
calling the company “exceptionally resilient.”

“And I believe this time will be no different,” Iger said.

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