United Parks 2025 Q1 Earnings Misses Targets as Net Income Declines 44%

United Parks (PRKS) reported its fiscal 2025 Q1 earnings on May 12th, 2025. The company saw a 3.5% reduction in total revenue, falling to $286.95 million from $297.42 million in Q1 2024, mainly attributed to a decline in admissions and attendance. Despite a negative quarter, United Parks maintains a positive outlook for the year, anticipating record revenue and adjusted EBITDA. The company plans significant investments and expects strong performance in the upcoming months.

Revenue
United Parks' total revenue for Q1 2025 was $286.95 million, marking a 3.5% decrease from the previous year. The breakdown includes admissions revenue of $156.12 million and food, merchandise, and other revenues totaling $130.83 million. This decline is primarily attributed to a decrease in admissions per capita and attendance, impacted by calendar shifts.

Earnings/Net Income
United Parks reported a net loss of $16.13 million in Q1 2025, a 44.0% increase from the $11.20 million loss in Q1 2024. EPS worsened to a loss of $0.29 per share from a loss of $0.17 per share, indicating deteriorating financial health.

Price Action
The stock price of United Parks edged down by 0.30% during the latest trading day but showed resilience over the longer term, climbing 7.33% over the past trading week and 11.20% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing PRKS shares following a revenue miss and holding for 30 days yielded a return of 2.69%, which significantly underperformed the benchmark return of 31.40%. The strategy exhibited a low Sharpe ratio of 0.04, indicating poor risk-adjusted returns, and a maximum drawdown of -43.39%, reflecting high risk. The compound annual growth rate (CAGR) was modest at 1.77%, with volatility at 39.96%. This performance suggests that a 30-day holding period is inadequate for capturing potential rebounds, emphasizing the need for a more dynamic investment approach to effectively leverage market opportunities.

CEO Commentary
Marc Swanson, CEO, expressed optimism about United Parks' performance despite a calendar shift affecting the Easter and spring break periods. He highlighted a 1.1% increase in per capita spending and significant investments in new attractions. Swanson also noted an 8.1% surge in April attendance and conveyed confidence in achieving record revenue and adjusted EBITDA in 2025, citing operational and financial improvements.

Guidance
United Parks anticipates record revenue and adjusted EBITDA for 2025, with about 75% of historical attendance and revenue opportunities still to come. The company plans to invest $175 million to $200 million in core capital expenditures and an additional $50 million in growth projects, supported by strong April performance and ongoing initiatives.

Additional News
In the first quarter of 2025, United Parks repurchased approximately 100,000 shares for a total of $4.6 million, as part of its capital allocation strategy aimed at enhancing shareholder value. The company also made significant strides in animal welfare, rescuing 205 animals during the quarter, bringing its total to over 42,000 animals aided. United Parks remains committed to wildlife conservation, working alongside various agencies to rehabilitate and return animals to their natural habitats. These efforts form part of the company's dedication to social responsibility and environmental sustainability.