During the peak of the pandemic, a common message was being spread by many financial investment firms. They felt that in the years that followed, there would be an explosion of interest in visiting theme parks due to the lockdowns and travel restrictions. This would result in a tidal wave of profits like nothing ever seen before.
Yet jump ahead to the present and it seems like investors have grown tired of theme parks, based on the falling stock prices everywhere you look.
Markets react to Q3 theme park financial results release dates
Recently, Six Flags (SIX) announced that it would be releasing its Q3 2023 financial report on 9 November. Since then, the company’s stock price has steadily declined like the first drop on a roller coaster. As of the close of the market on Friday, SIX’s price had dropped to $18.94. This has placed it at the bottom of its price range for the past 52 weeks. The daily financial reports say SIX’s price dropped 7.25% alone on Friday.
Rival theme park chain, Cedar Fair (FUN), announced that it would release its Q3 2023 financial results on 2 November. Ever since Cedar Fair’s stock price has also undertaken a slow but steady decline. As of the close of the market on Friday, 20 October, Cedar Fair’s price was $35.08. This is just a hair above the chain’s overall 52-week low of $34.35.
SeaWorld Entertainment (SEAS) is another company following the same pattern. Having set its own Q3 2023 earnings report release for 8 November, over the past month, the SEAS stock price has dropped from a high of $48 to close on Friday at $42.49. This is just above the company’s 52-week low of $42.24. That took place just a week prior on Friday 13 October.
Disney and Universal
Disney is currently set to release its own Q4 and Year-End 2023 financial reports on 8 November 2023. Disney’s financial calendar is different from other theme park chains. Its new financial year typically starts on 1 October, rather than the traditional calendar year. That said, upon this announcement, Disney’s (DIS) stock price saw a brief rise for about a week, only to begin its own steady drop.
Disney’s stock price as of the market close on Friday 20 October was $82.65. This sits just a few dollars above its own 52-week low price of $78.73, which I believe took place near the start of October. Unlike the other chains mentioned previously, Disney is more than just theme parks. Rather, it is an entertainment empire, owning a movie studio, streaming services, book publishing, as well as broadcast entertainment and sports networks.
So, even if the parks are doing well, keep in mind that failings elsewhere in the company can be the true cause of a falling stock price.
Interestingly enough, the only North American theme park chain whose stock price is doing very well right now is Universal Studios’ parent company, Comcast. Comcast is preparing to release its own Q3 2023 financial report on 26 October. However, the losses to its stock price since that date was set have been minimal.
Comcast’s (CMCSA) stock price closed out on Friday at $42.86. This is actually closer to the company’s 52-week high price of $47.46 rather than its 52-week low of $30.04. Much like Disney, Comcast’s performance isn’t only based on the success of its theme parks.
The main difference between Comcast and Disney is that while Comcast now owns a movie studio, a streaming service and several broadcast networks in addition to the parks, the company also owns the physical infrastructure in order to send those entertainment offerings over a high-speed network right into customers’ homes.
What will the theme park financial results reflect?
Otherwise, this does beg the question: why are all the rest seeing their stock prices falling?
At first glance, this does appear as if investors may have lost faith in the theme park industry. But I don’t believe this is the case. Yes, this could reflect some disappointment by investors into how the chains have performed over the 2023 busy season. However, there is also the seasonal nature of the theme park business to contend with as well.
There are a few parks in each group able to operate year-round in the warmer climates of California, Texas or Florida. Yet the performance of these chains is still bound by the age-old seasonal nature of the theme park business. Performance numbers can peak in the busy summer and Halloween seasons before the parks close entirely for the cold winter weather. As such, some investors may be choosing to shed these stocks ahead of the winter season in order to focus their investments elsewhere.
As for who appears to have handled the 2023 season the best, we will just have to wait a few more weeks for the official report release dates. Then we’ll also see how the major investment firms choose to react.
Top image: Six Flags Great America
