Walt Disney Earnings Conference Call Nuggets: Domestic Visitors and Succession Plans

The Walt Disney Co. (NYSE:DIS) reported its fourth quarter and fiscal 2011 earnings and in its subsequent conference call, the company answered the following analysts’ questions we thought you’d like to know.

Domestic Visitors

Jessica Reif Cohen asked: We know historically that international visitors tend to save longer and spend more, but are you seeing anything from domestic visitors, anything different in consumer behavior, the theme parks in terms of either the length of stay or spending patterns?

Jay Rasulo – Senior EVP and CFO responded: No, once folks book their vacation, they pretty much are behaving as they have in the past, especially if you look at the growth in our merchandise sales. It’s a little bit slower in the mix than the growth in (RNA) and our food and beverage sales because of great programming on the food and beverage side that has kept that variable growing.

We see our guests behaving pretty much as they have in the past, and their spending is increasing at a pretty heavy level. If you look at the overall mix, I would say Group business is still only about 90 percent of where it was before we came into the downturn.

I think there is a little more opportunity for us there, because it’s very strong counter cyclical programming for us. The goal is to get folks back at the resort at our normalized levels of pricing throughout the year and once they’re there, they behave as they always did.

Succession Plans

Jessica Reif Cohen – Bank of America/Merrill Lynch asked: Bob, you announced the beginning of succession plan. Could you discuss your priorities for the balance of your tenure? Is there anything that you’d really like to accomplish other than the path you started on at the Company? Are there any businesses that you think Disney should be in that it isn’t in now?

Robert A. Iger – President and CEO responded: The strategic priorities that I articulated back in ’05 when I got the job remain very much in place, starting with the making of great product. The world is offering us even more opportunities to leverage great product, either because of new technology or compelling growth in emerging markets. That’s the real value proposition for us.

I want nothing more for this company than to make great product. If I had to say I had a goal in mind over the remainder of my tenure,   it’s to improve the quality of our output. Technology is a huge, huge strategic priority for us. I talked about it when I talk about content. It should be used to distribute more effectively and to monetize better. It should also be used to make our product better.

We certainly see that when it comes to filmed entertainment but obviously is our theme parks.

On the international front, we announced three big deals this past year: China, India and Russia. It is imperative for this company to plant a number of seeds in the emerging world. When you look at the remainder of this decade, over the next decade, growth from emerging markets is going to outpace growth in the developed world and that’s the first time that’s happened in 200 years.

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