Mars Needs Moms Hurts Disney's Q2 Earnings
Increased operating income at our domestic parks and resorts was driven by higher guest spending and hotel occupancy, partially offset by increased costs. Higher guest spending reflected increased average ticket prices and daily hotel room rates. Increased costs reflected labor cost inflation, higher pension and healthcare costs and expansion costs for Disney California Adventure at Disneyland Resort.
Improved results at the consolidated international parks and resorts reflected higher attendance and hotel occupancy at Disneyland Paris and Hong Kong Disneyland Resort and higher guest spending at Hong Kong Disneyland Resort, partially offset by labor cost inflation at Disneyland Paris.
Studio Entertainment revenues for the quarter decreased 13% to $1.3 billion and segment operating income decreased 65% to $77 million. Lower operating income was primarily due to decreases in worldwide home entertainment and worldwide theatrical distribution and higher film cost write-downs.
The decrease in worldwide home entertainment was primarily due to lower unit sales reflecting the strong prior-year performance of Toy Story 1 and 2 titles and the animated version of Alice in Wonderland in the domestic market and Up in international markets. These decreases were partially offset by higher net effective pricing due to increased Blu-ray format sales. Lower results in worldwide theatrical distribution reflected the performance of Mars Needs Moms in the current quarter which also drove higher film cost write-downs. Current quarter theatrical distribution results also included Tangled and Tron: Legacy, primarily internationally, while the prior-year quarter included the worldwide release of Alice in Wonderland.
Consumer Products revenues for the quarter increased 5% to $626 million and segment operating income increased 7% to $142 million as improvements at the Disney Store North America and Merchandise Licensing were offset by a decrease at Publishing.
The increase at the Disney Store North America was primarily due to comparable store sales growth and improved margins reflecting the strength of Tangled and Toy Story merchandise. Improved Merchandise Licensing results reflected the strong performance of Cars and Tangled merchandise. The decrease at Publishing was driven by minimum guarantee shortfall recognition in the prior-year quarter.
Interactive Media revenues for the quarter increased 3% to $159 million and segment operating income decreased by $60 million to a loss of $115 million. Decreased operating results were driven by the acquisition of Playdom, including the impact of acquisition accounting, and higher mobile and virtual world product development costs.
OTHER FINANCIAL INFORMATION
Corporate and Unallocated Shared Expenses
Corporate and unallocated shared expenses increased from $91 million to $122 million driven by the timing of expenses and higher compensation related costs.