SeaWorld Orlando announced their first quarter results on Tuesday morning, with a huge dip in both earnings and attendance company wide.
Here are a few of the key points of the press release.
Overview
-Total revenues were $186.4 million, compared to $220.2 million in the first quarter of 2016, primarily due to a shift in the timing of the Easter holiday into the second quarter of 2017 which also impacted the timing of spring break for a number of schools.
-Year-to-date attendance through the end of April is essentially flat over the prior year period.
-Exciting lineup of new attractions coming online in the second quarter.
-Season pass sales revenues are up nearly 6% through the end of April compared to the same period of 2016.
-The company remains on pace to achieve its cost optimization program net cost savings targets for the year.
-For the full year of 2017, the company expects Adjusted EBITDA[1] in the range of $330 million to $360 million.
SeaWorld Parks and Entertainment generated total revenues of $186.4 million, a decrease of $33.9 million, or 15%, compared to the first quarter of 2016. That’s a pretty large dip. For attendance, the company declined by approximately 491,000 guests, or 14.9%, compared to the first quarter of 2016.
The company attributes a shift in the Easter Holiday, from the first quarter last year to the second quarter in 2017, as the main reason for the drop in attendance. To a lesser extent, the company blames the closing of One Ocean at SeaWorld San Diego for a dip in attendance at that park.
Interestingly, SeaWorld seems to be trying to shift the attention away from the first quarter by saying that “attendance has been flat through the end of April”.
On a year-to-date basis through the end of April, attendance was essentially flat over the prior year period and season pass sales revenues were up nearly 6% compared to the same period of 2016.
While it April attendance may have been flat, that month falls into the second quarter and shouldn’t factor into the first quarter results. While it is important to look to improve, the fact remains that attendance was down almost 15% for the first quarter. That’s a pretty big number.
SeaWorld doesn’t release individual park attendance for the quarterly results, but they did touch on the fact that SeaWorld San Diego was down due to the transition from One Ocean. Our sources indicate that One Ocean’s closing at that park actually had a huge impact, that could be turned into a positive. According to sources close to the park, attendance at SeaWorld San Diego could have been down as much as 22%. It was public perception that the park had gotten rid of the whales, and some even say that some people don’t understand that Orcas are Killer Whales. They aren’t understanding that the two are the same species. So, how is this a positive? It shows that the public still supported SeaWorld when they had the Killer Whale Shows. Once they thought that the whales left, the support left with it. People still want to see Killer Whales in an up close environment, which could have been a great driving point for SeaWorld.
Looking ahead, SeaWorld San Diego will have a massive summer line up, as they roll out their new Orca Experience, which will see the signature Killer Whales return with a new, more educational show and habitat. The park will also unveil an all new interactive Dark ride and animal habitat with Ocean Explorer. And they will also have a brand new nighttime show with Electric Ocean. SeaWorld Orlando will also be getting the new Electric Ocean, as well as new show additions and a huge VR overhaul to Kraken. SeaWorld San Antonio will get a brand new coaster, Wave Breaker. Also, looking ahead to the results for the second quarter, response has been overwhelmingly positive for the company’s Seven Seas Food Festival and Food & Wine festival at Busch Gardens. Also, Busch Gardens Williamsburg just opened the all new Invadr, which has gotten rave reviews.
Also at the end of the first quarter, SeaWorld saw a 21% purchase by Chinese group Zhonghong Zhuoye Group Co., Ltd. That deal was finalized on the 8th of May and will see even more big changes coming to the company. What kind of big changes? An SEC filing shows that SeaWorld CEO, Joel Manby has sold off about 17,000 shares of company stock. While no announcements have been made, that is a pretty good indication that Mr. Manby might not be at the company for the long term. Again, that is just speculation on our part.
While 2017 has had a rough start for SeaWorld, the company has all the cards laid out for a massive summer and great remainder of the year.
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