Disney’s theme parks are struggling in another warning signal for the US economy.
Disney’s operating profit for its domestic parks and experiences division declined by 3% from the previous year to $2.2 billion, while revenues grew by 2% to $8.4 billion.
The company blamed the decrease in operating income at its domestic theme parks on high costs linked to inflation and a larger drop in consumer demand than expected.
Disney warned that the “demand moderation” for its parks and experiences would likely continue and could impact the next few quarters.
In an executive commentary shared with Business Insider, the company said that “despite recent economic uncertainty,” it is “confident about the long-term opportunities” in its experiences business.
Disney’s theme parks have been a key driver of revenues in recent years, with the company committing an extra $60 billion last year to expand them further.
As high inflation has hammered Americans’ wallets, some consumers have cut back spending on trips and theme parks. Comcast also saw revenues from its Universal Studios parks fall in its second-quarter earnings in July.
Cuts in consumer spending have been felt across the US economy.
Fast-food chains such as McDonald’s, Burger King, and Taco Bell have all launched discounts and value meals to try to lure in cost-conscious consumers as some reported slowing sales.
Starbucks also reported a decline in visits due to a “challenging consumer environment.”
It’s not all bad news for Disney, however.
The entertainment behemoth’s earnings were buoyed by strong results in its combined streaming division, which turned a profit for the first time, and big hits at the box office, including the Pixar film “Inside Out 2.”
