SeaWorld Entertainment (SEAS 24.80, +3.67, +17.37%) is trading sharply higher
today after reporting Q2 results this morning. Household name SeaWorld
is a theme park and entertainment company. It owns or licenses a portfolio of
brands that includes SeaWorld, Busch Gardens, Aquatica, Sesame Place, and Sea
Rescue. It operates 12 destination and regional theme parks throughout the
U.S., including in Florida, Texas, and California, that feature a diverse array of
thrill rides, water slides, shows, and other attractions.
SEAS also cares for what it believes is one of the largest zoological collections in the world and has helped lead advances in the care of animals. The company rescues and rehabilitates marine and terrestrial animals that are ill, injured, orphaned, or abandoned with the goal of returning them to the wild. The SeaWorld rescue team has helped more than 31,000 animals in need, from hurricane-displaced sea lions to oil spill endangered penguin chicks, over the course of the last 50 years.
Turning to the Q2 results, non-GAAP EPS came in at $0.29, which is better than market expectations. Revenue rose 4.9% year/year to $391.9 mln, much better than expected. Attendance increased by 4.8% to 6.4 mln guests. SEAS says the results were driven by new pricing strategies, new marketing and communications initiatives, and the positive reception of new rides, attractions, and events. In addition, SEAS continued to experience a double-digit increase in season pass sales revenue and an increase in total revenue per capita driven by a 6.5% increase in in-park per capita spending.
SEAS is particularly pleased with its Q2 attendance growth, which more than offset the negative impacts from unfavorable weather across several markets in the quarter and the earlier timing of the Easter holiday in 2018, which benefitted Q1 at the expense of Q2. Looking ahead, as it enters the last few weeks of its peak summer season, SEAS is encouraged that year-to-date results through July for attendance, season pass sales, and total revenue have remained strong.
SEAS is pleased with the positive guest reception of its new attractions and events across its parks. Currently, its Electric Ocean event, a sundown spectacular that spotlights glowing sea creatures and fireworks displays, has been in full swing at each of its SeaWorld parks, and its extended hours Summer Nights event is operating at each of its Busch Gardens parks.
In sum, Q2 was a very strong quarter for SEAS, featuring nice upside, especially on the revenue line. After two EPS misses in a row in Q3 and Q4 of last year, SEAS has now posted back-to-back upside quarters in Q1 and Q2, and they sound positive about 2H18. Looking ahead, the company has its popular Halloween and Christmas events booked, which should continue to drive further attendance growth. The company has also been looking to reduce costs by reducing unnecessary expenses and finding ways to operate the business more efficiently.
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