United Parks Revenue Falls as Attendance Weakens
Adjusted EBITDA margin narrowed about 1.7 percentage points to 40.4%.
United Parks & Resorts (PRKS), the theme-park operator, reported lower second-quarter revenue as an attendance decline outweighed higher spending per guest.
Revenue fell 1.4% from a year earlier to $483.3 million as attendance declined 2.9% to 6.06 million. The attendance drop followed first-quarter weakness tied largely to weather, while the second quarter faced an earlier Easter holiday and continued softness in international visitation. Attendance would have been flat after adjusting for Easter timing and international guests, compared with growth of more than 1% in the first quarter after adjustments for weather and international visitation.
Net income dropped 21% to $63.3 million, and adjusted EBITDA fell 5.2% to $195.5 million, both declining faster than revenue. Operating income decreased 16.6% to $117.1 million as total costs and expenses rose 4.7% to $366.2 million.
Guest spending continued to shift toward purchases inside the parks. Admission revenue fell 4.6% to $244.1 million, while food, merchandise and other revenue increased 2% to $239.2 million. In-park spending reached a second-quarter record of $39.51 per guest, up 5.1% on higher penetration and pricing initiatives, while admission revenue per guest fell 1.8% to $40.31 because of admissions-product mix.
Overall revenue per guest rose 1.5% to $79.82, slowing from 2.1% growth in the first quarter. Admission spending deteriorated from a 0.5% decline in the prior quarter, while in-park spending growth eased from 5.3%. The spending gains provided a smaller cushion against lower attendance as the year progressed.
Expenses added pressure. Operating expenses increased 5.3% and selling, general and administrative costs rose 3.4%. Business-optimization, development and strategic-initiative costs climbed to $10.1 million from $3 million, including $8.8 million related to optimization and strategic initiatives. Free cash flow declined 20.5% to $101.5 million as capital expenditures rose 28% and operating cash flow fell 6.2%.
Forward bookings offered a firmer signal: advanced-bookings revenue for Discovery Cove and group business rose by double digits, and early ticket sales for Halloween events were running ahead of last year. United Parks also accelerated repurchases, buying 3.3 million shares for about $125 million during the quarter and 5.9 million shares, or 12.1% of shares outstanding, during the first half.