Anticipated park closures and disruptions due to Hurricane Milton could hit Walt Disney’s revenues, according to analysts at Goldman Sachs.
The company estimated Tuesday that the hurricane, which is expected to make landfall in central Florida as soon as Wednesday, could reduce earnings before interest and taxes for Disney’s Parks and Experiences segment by about $150 million to $200 million in the current fiscal first quarter of 2025. Goldman’s estimate would exceed the effect on Disney from Hurricane Irma in 2017, which dropped revenues by about $100 million after the parks closed for two days and some cruise ships were disrupted, the company said.
Goldman Sachs cut its estimate for Disney’s fiscal 2025 earnings per share from $5.22 to $5.14. It also estimated that Disney’s first quarter domestic visitor numbers would take a hit from the storm, with a 6% decline forecast instead of a previous estimate of a 2% drop. The company’s estimates for Disney’s recently concluded fourth quarter remained largely the same, with earnings per share expected at $1.16 and Parks and Experiences segment operating income at $3.8 billion.
As of Tuesday morning, the storm was located about 540 miles (875 kilometers) southwest of Tampa and was moving at 12 mph (20 km/h). With sustained winds of 140 mph, the storm dropped to a Category 4 hurricane and could hit the Florida coast as a Category 3.
The storm is expected to make landfall in the Tampa area, which has not been directly hit by a hurricane since 1921. The storm will then move toward Orlando, where Disney World is located, as the storm decreases in intensity.
Disney has made no announcements about possible closures. Disney spokespeople did not immediately respond to CNBC’s request for comment on the new earnings estimates.