If Netflix was one of the companies better suited to the special circumstances created by the Covid-19 pandemic, Disney was certainly at the other end of that spectrum. With theme parks and resorts closed, cruises suspended, and movie theaters shuttered for months, the media and entertainment giant from Burbank, California was hit by the crisis on multiple fronts.
“COVID-19 and measures to prevent its spread impacted our segments in a number of ways, most significantly at Parks, Experiences and Products,” the company wrote reporting results for the fiscal year ended October 3, 2020. “Our theme parks were closed or operating at significantly reduced capacity for a significant portion of the year, cruise ship sailings and guided tours were suspended since late in the second quarter and retail stores were closed for a significant portion of the year. We also had an adverse impact on our merchandise licensing business. In addition, at Studio Entertainment we have delayed, or in some cases, shortened or cancelled, theatrical releases, and stage play performances have been suspended since late in the second quarter.”
Taking all these adverse effects into account, it's no surprise that Disney's growth stalled for the past two years, with fiscal 2021 showing slight improvements over 2020 but still not matching pre-pandemic results. In the three months ended January 1, 2022, the first quarter of Disney's fiscal 2022, the company managed to recover its Covid losses for the first time, seeing revenue climb 35 percent compared to the same quarter of last year and 4 percent compared to the final three months of 2019, which were unaffected by the pandemic.
As the following chart shows, Disney's Parks & Experiences business in particular roared back to life last quarter, more than doubling in revenue from the previous year and nearly matching pre-Covid results. Content Sales and Licensing, heavily dependent on the theatrical market, still showed weakness, recovering just one third of its pandemic losses. Meanwhile, Disney's TV networks were largely unaffected by the pandemic, as was the company's consumer products business. Direct-to-consumer sales, i.e. Disney+, ESPN+ and Hulu, actually profited from Covid restrictions, with Disney+ in particular growing much quicker than it probably would have in normal circumstances.