Weaker sales dent Disney profits

Firm reports a 26 per cent drop in profit, attributed mainly to poor theme park sales.
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Net profit for the third quarter between April and June came in at $954m (£579m), from $1.28bn year-on-year.
Sales for the period were $8.6 billion, down seven per cent from the $9.2bn recorded a year ago.

Consumer Products sales for the quarter decreased ten per cent to $510 million and profit decreased 37 per cent to $96 million.

Lower segment operating income was due to a decrease at the retail business driven by the Disney Stores North America and lower earned royalty revenue across
multiple product categories at merchandise licensing due to the difficult retail environment.

The decrease at the Disney Stores North America reflected a full period of operations in the current quarter whereas the same period in 2008 included a
partial period of operations and royalty revenue from the former licensee.

Disney's theme park profits dropped by 19 per cent, accounting for much of the firm's loss, but this compared favorably with last quarter's 50 per cent decline.

The company said visitors were spending less at its theme parks, both in the US and in Paris, France.

Despite the market's reaction, Disney said it was heartened by the results.

"While a tough global economy impacted our performance in the quarter, we remain encouraged by the relative strength of our business," said Disney president Robert Iger.

He continued: “That strength is the result of Disney’s combination of strong brands, consistent business strategy and the steps we’ve taken to make our businesses more efficient without sacrificing quality.”


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