Herschend Entertainment Co. LLC

Overview Key strengths Key risks Significant barriers to entry in the market due to the high cost of developing a theme park near a desirable population center. A high level of seasonality, which can magnify the effect of extreme weather events and unexpected sales missteps when they occur. Sizeable cash balances following strong operating performance in 2023 and the divestment of World Choice Investments (WCI). Reliance on consumer discretionary spending, which can be volatile over the economic cycle. Strong brand recognition at its Dollywood and Silver Dollar City parks. Limited scale and geographic diversity compared with other larger rated leisure operators. We expect Herschend?s revenues to increase 10%-15% in 2024, primarily driven by a full year of performance from Dollywood?s

...We expect Herschend Entertainment Co. LLC's leverage will remain 2.0x-2.5x in 2024, incorporating a potential slowdown in consumer discretionary spending. We expect Herschend's revenues to increase 10%-15% in 2024, primarily driven by a full year of performance from Dollywood's HeartSong Lodge & Resort, a new attraction at Silver Dollar City, and the new Dolly Parton Experience at Dollywood. We also expect modestly higher attendance levels and stable per capita spend across its portfolio of properties, driven by a favorable attendance mix at higher per-capita spend properties. Nonetheless, we believe Herschend's revenue growth will begin to moderate in 2025, with total revenues increasing in the low-single- digit percent area following strong operating trends as the company recovered from the COVID- 19 pandemic. We expect the slowing in Herschend's top-line growth will primarily be because of lower growth in attendance or fewer in-park purchases. Additionally, theme parks broadly have benefitted...

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