Disney (DIS - Free Report) is down 36.5% year to date on concerns about lost profits from the lockdown of its theme parks due to the coronavirus outbreak.
The company is closing Walt Disney World, its flagship theme park resort in California and Florida because of the pandemic. Moreover, Disney announced the closure of Disneyland Paris and the suspension of all new departures with the Disney Cruise Line starting Mar 15 through the end of the month, per a Reuters report.
The rising incidences of coronavirus, which is now officially designated as a pandemic by the World Health Organization (WHO), prompted several countries to place the worst-hit cities under lockdown to contain the virus.
Coronavirus Threatens Disney’s Top-Line Growth
Disney’s top-line is expected to take a hit as tourism plummets. The company has temporarily shuttered all eleven theme parks across North America, Asia and Europe, which are significant growth drivers. Notably, three of its Asian parks– Disney Shanghai, Disney Hong Kong and Disney Tokyo have been shut down.
Disney generated more than $26 billion in sales at its Parks, Experiences and Products division in fiscal 2019, representing 37% of the company's overall revenues.
Disney expects second-quarter fiscal 2020 operating income to be negatively impacted by park closure in Shanghai and Hong Kong due to coronavirus. While the Shanghai closure is expected to hurt operating income by $135 million, Hong Kong’s closure will result in a negative impact of roughly $145 million.
The Walt Disney Company Price and Consensus