(Reuters) - Shares of Walt Disney Co (DIS.N) dropped 1.8% on Thursday after the media company delayed the reopening of theme parks and resort hotels in California, following a surge in COVID-19 cases in the state.
The reopening of Disneyland Park and Disney California Adventure Park that was earlier scheduled for July 17 will be delayed until Disneyland receives an approval from state officials, the company said.
In late January, the pandemic started battering businesses across Disney’s global portfolio when the company shuttered Shanghai Disney Resort and Hong Kong Disneyland.
Disney closed Walt Disney World in Orlando, Florida - the company’s largest theme park - in March. The park is scheduled to reopen on July 11, although petitioners are pressing Disney for a delay, citing a spike in COVID-19 cases in Florida.
Last month, Disney estimated global lockdown measures aimed at fighting the spread of the contagion slashed its profit by $1.4 billion, mostly from its shuttered theme parks.
In a June 11 report, Sanford C. Bernstein analyst Todd Juenger wrote that Disney is losing about $1 billion a month while parks are closed, relative to what it otherwise would have earned.
The coronavirus-ravaged U.S. economy has begun to reopen but there is little clarity either on the pace and durability of the recovery, with new cases in the country continuing to rise.
“The challenge is twofold: the longer the delay, the more money Disney loses. I also think the larger question is what’s happening to demand - the longer this health crisis goes on, the more people delay their thoughts about travel,” said LightShed Partners media analyst Richard Greenfield. “If Disneyland is uncomfortable opening, can they really open Disney World?”
Last week, unions representing 17,000 workers at Disneyland expressed concerns to the state’s governor that the theme park would not be safe enough to reopen by the company’s target date.
Like other major companies, Disney is confronting both the coronavirus pandemic and renewed calls for racial equity. On Thursday it announced it was “retheming” its “Splash Mountain” theme park ride, based on the controversial 1946 film “Song of the South.”
Disney said the ride, at Disneyland and Magic Kingdom park in Florida, would now feature characters from the animated film “The Princess and the Frog,” which starred its first Black princess.
Reporting by Helen Coster in New York and Akanksha Rana in Bengaluru, Editing by Sherry Jacob-Phillips and Tom Brown