There's a lot to discuss with Hugh Johnston, the Disney CFO who joined us now. Hugh, it's great to catch up with you. We spoke for years in your years of PEPSI fantastic to see you in a new c Let's just get straight into these numbers if we can cost cutting. Can you walk us through where that cost cutting exercise is really buying?
Yeah, it actually is. In Good morning to you John and to the team there. I'm very excited about that the progress that we've made on cost cutting. To be honest, when you do these programs, you're always looking for is it actually flowing to the bottom line, And what we communicated yesterday was five hundred million dollars of saves flowed through to the bottom line, and you can see it in the P and L in the form of margin improvement to the tune of three hundred and fifty basis points.
That's a huge, huge margin jump and something that we've got a lot of confidence in will continue because we're really getting good traction and good momentum on managing our costs more tightly while reinvesting back in the business to drive the top line as well.
So here you've got a really strong story to tow this morning the stock as well. I certainly don't want this conversation to drown into a conversation about activists, but I need to ask about now some paths. Have you spoken to him personally at all since you took on the new role.
Yeah, I spoke to him a couple of times, briefly, not recently, And honestly, we're just at a very different spot on this. We feel right now like we've got terrific momentum. Bob and the team have spent the last year both fixing the business and now pivoting to building the business, and you can see it in the results, and you can see it in our confidence as well.
The share of purchase that we've communicated, the earnings guidance we've communicated, the increase in the dividend all suggests that we have confidence that we're not only going to be able to do this for the short term, but we're going to be able to do it for multiple years. So honestly, I don't think we need any incremental help.
I think we need to keep this management team focused on doing the things it's doing so that we can continue to deliver great results and make progress on the big strategic issues that will help us emerge from the disruption that's going on in media in a much much stronger position than we were in before.
To some analysts, including our run in Bloomberg Intelligence, wondering whether you've been too conservative on the outlook for streaming to turn a profit by the fall, see what would you say back to them this morning.
I'd say the guidances is to do Q four. If we do better, we do better. But the guide is Q four.
You can you give us a name and maybe a price for this bundle of the sports bundle. Everyone's just asking that forty dollars, fifty dollars, call it Spike.
Yeah. No, we haven't come up with a name for it yet. You know, the focus when you do a three way JV is on how do we make sure that we get the operating principles right so that the parties are aligned up front and they're aligned on going and delivering a great product to consumers. And that's the real focus here is how do we make it easier and reduce friction for the sports fans. So we're going to get to pricing shortly. We'll get to a name
at some point, I'm sure. But what's most important is I think we're going to deliver a product that's going to make your life a hole lot better if you're a sports consumer. Hugh.
Do you think that ultimately the idea of a bundle going back to the future and getting people with reduced friction to find their sports team and find the game that they want to watch is going to take eyeballs away from some of the other providers, the cable networks that have traditionally had these contracts. You're going to be directly on some of these sports rights.
Well, I think it's going to be targeted more at people who either were never in the cable bundle or people who had already departed from the cable bundle, you know, at the margins. Might there be a little bit of shifting, Yeah, there could be, But to tell you the truth, I don't think sports is going to be the reason that someone makes that shift all by itself. I think there are a lot of factors that weigh into that. From our perspective, we're focused on meeting the fan wherever they
choose to be. I don't think we're motivating the fan to move. But if the fan does move. We want to be there because we want ESPN to be everywhere.
He We're super interested in how you're going to bid for those sporting rights. Do you think you might bid for them as joint venture? How's this going to work in a months and years to come.
No, quite the opposite. We all will be bidding independently. And that's something that we're quite firm on is that is not the purpose of the venture. The purpose of the venture is purely distribution. It's not about procurement of content. So we'll continue to compete with each other for sports rights just as we always have. It'll actually, I think, be a great benefit to the league because it's no different in terms of the way we bid for sports rights.
But that reduced friction benefits all of the leagues as well. So I think the leagues will actually be pretty optimistic about.
There was some reporting yesterday that suggested the leagues weren't aware of this joint venture. Q. Have you've spoken to them?
I have not personally, but we certainly have as the Walt Disney Company. Candidly, when you're putting together a three way GV and a three way GV in the media, business. Trying to keep it private until you get the deal done is challenging enough to involve more parties, frankly, just would have created I think too much risk. So we certainly let them know the moment that we announce it. Here.
We have lots more questions about the sports and the streaming, and hopefully we can ask you about them. But I do want to shift gears just a bit to Shanghai's utopia. The idea that the Chinese offerings of Disney did pretty well actually worstallwarts, which was surprising because we've heard a lot of a different tone from other US companies. How much are you seeing Disney welcomed in China despite some of the rhetoric that we've heard out of the Chinese Communist Party.
Yeah, we're very much welcomed. You know, Disney is just sort of a beloved brand. It's part of the reason that I came here, is it truly is an iconic, beloved brand, not just in the United States, but really almost everywhere in the world. So the Chinese consumer is very much responding to what's a fabulous park experience, which, by the way, has been true in the rest of our international parks as well, every one of our international parks made money in the quarter, and they're all doing
extremely well. International parks revenue grow thirty five percent. So I'm very, very optimistic about all the parks outside I views, including the park in China.
We thought people loved McDonald's and Starbucks as well. But there's been boycotts in certain places against America Inc. And you think of the Walt Disney company, I think as the company behind America Inc. All around the world. To you, how have you avoided that as a company.
It's a great question, and in all candor, I'm so new here, I'm not sure I can give you a great reason in that regard, other than the fact that as a company, what we're really focused on is just bringing joy to families, right, We're about bringing smile to people's faces, or about families coming together. And given that's who we are, I think maybe we tend to be a little bit more immune to that than most here.
It sounds like you've been there years based on that response, Hugh Johnson, it's good to hear from you, sir. Thank you very much for being with us. We look forward to catching up with you in the quarters and the years. To come. Hugh Johnson there the Disney CFO