Theme park operator United Parks & Resorts (NYSE: PRKS) missed Wall Street’s revenue expectations in Q3 CY2025, with sales falling 6.2% year on year to $511.9 million. Its GAAP profit of $1.61 per share was 28.8% below analysts’ consensus estimates.

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StockStory’s Take

United Parks & Resorts faced a significant setback in Q3 as results came in well below Wall Street expectations, prompting a sharp market reaction. Management cited several factors behind the underperformance, including unfavorable calendar shifts, poor weather during key holidays, a pronounced drop in international visitation, and shortfalls in cost execution. CEO Marc Swanson was candid about the challenges, stating, "We're obviously not happy with the results we delivered in the quarter." He explained that, after adjusting for event timing and international declines, attendance would have been roughly flat, but the overall environment remained inconsistent, especially among U.S. consumers. Swanson also noted a rare reversal in international trends, attributing the decline to broader macroeconomic issues and travel-related headwinds.

Looking ahead, United Parks & Resorts’ management is focusing on operational improvements, new guest offerings, and targeted investments to restore growth. Swanson highlighted the company’s commitment to cost discipline and capital projects, including several major new attractions scheduled for 2026, such as SEAQuest: Legends of the Deep in Orlando and an expanded Lion & Hyena Ridge at Busch Gardens Tampa Bay. The company expects forward booking revenue at Discovery Cove and group business to remain strong, and sees a path to higher attendance and improved margins through enhanced marketing and passholder programs. Swanson remains confident, stating, “We have high confidence in our ability to deliver operational and financial improvements that will lead to meaningful increases in EBITDA, free cash flow, and shareholder value.”

Key Insights from Management’s Remarks

Management attributed the quarter’s shortfall to a mix of external and internal factors, while emphasizing areas of resilience and future opportunity.

• Calendar and weather impacts: The timing of the July 4th holiday and adverse weather during both the July and Labor Day periods led to a significant reduction in peak attendance, particularly affecting parks in Florida and the Mid-Atlantic.
• International visitation decline: Management pointed to a sharp drop in international guests—approximately 90,000 fewer visits than last year—driven by macroeconomic weakness, visa challenges, and travel headwinds, reversing growth seen earlier in the year.
• In-park spending growth: Despite lower attendance, per capita spending within the parks increased in 20 of the last 22 quarters. Swanson highlighted that in-park per cap was up in both Q3 and October, suggesting resilient guest engagement with food, beverage, and premium offerings.
• Cost management shortcomings: Swanson acknowledged disappointment in cost controls and execution, noting that both operating and SG&A expenses rose. In response, new initiatives and processes have been implemented to better manage expenses and drive efficiencies in coming quarters.
• Product and event momentum: The company reported record attendance at its Halloween Howl-O-Scream events in Orlando and San Diego, and continues to invest in differentiated holiday programming and new attractions to drive future demand.

Drivers of Future Performance

United Parks & Resorts expects operational improvements, new attractions, and marketing investments to be the primary levers for recovery and future growth, while acknowledging ongoing macro and competitive headwinds.

• Major attraction rollouts: Several high-profile additions are slated for 2026, including SEAQuest: Legends of the Deep in Orlando, a reimagined Shark Encounter in San Diego, and Barracuda Strike in San Antonio. Management believes these should refresh consumer interest and drive incremental attendance.
• Passholder program enhancements: The new 2026 pass program features expanded benefits and is being marketed more aggressively, with management expecting this to help stabilize and grow the passholder base following recent declines. Early Black Friday sales trends are encouraging, but management cautioned that closing the gap will take time.
• Cost discipline and efficiency: New cost control measures and expense management initiatives are underway, with management aiming to improve margins despite inflation and competitive pricing pressures. However, Swanson noted that ongoing investments in guest experience and marketing will continue to weigh on short-term profitability.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be watching (1) the impact of new ride and event launches on both attendance and in-park spending, (2) progress in stabilizing and expanding the passholder base through the new 2026 program, and (3) whether cost management initiatives lead to visible improvements in operating and adjusted EBITDA margins. We will also track international travel trends and sponsorship pipeline developments as additional sources of upside or risk.

United Parks & Resorts currently trades at $35.88, down from $46.23 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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