Disney reported fiscal third-quarter earnings that exceeded Wall Street expectations, with adjusted earnings per share of $2.06 and revenue of $25.2 billion, up 7% year-over-year. The results reflect robust performance in the Experiences division, driven by domestic theme parks and the box office success of Toy Story 5, while streaming remains a key focus for investors.
Disney's Experiences division posts record revenue
The Experiences segment, which includes Disney's six global theme parks, cruise line, and merchandise licensing, reported operating income of $3.02 billion, a 20% increase from the prior year, and revenue of $9.97 billion, returning to record levels. U.S. park attendance rose 3% year-over-year, with global guest numbers up 4%. The division's growth was bolstered by the theatrical release of Toy Story 5, which surpassed $1 billion in global box office receipts within weeks of its release. Merchandise sales tied to the franchise also contributed to the segment's strong performance.
CEO Josh D'Amaro outlines strategic priorities
Disney CEO Josh D'Amaro highlighted the company's focus on intellectual property investment, consumer engagement, and advanced technologies, including AI, as key pillars of his long-term strategy. In a letter to shareholders, D'Amaro and CFO Hugh Johnston noted that Disney's results demonstrated "a unique ability to engage consumers at scale, both digitally and physically, even amid macro uncertainty." The company also announced the sale of its 50% stake in A+E Global Media, including brands like Lifetime and The History Channel, for $1.2 billion, with proceeds directed toward $9 billion in share buybacks for the year.
Streaming and cost-cutting measures remain in focus
While the Experiences division delivered strong results, Wall Street continues to scrutinize Disney's streaming business, which faces competitive pressure and subscriber growth challenges. The company has implemented cost-cutting measures, including layoffs across divisions such as ESPN, to improve profitability. Analysts had anticipated updates on streaming subscriber trends and advertising revenue growth, though specific figures were not disclosed in the earnings report.
Macroeconomic factors and international tourism trends
Disney's theme parks division noted that international tourism remains a challenge, citing factors such as tariffs, immigration policies, and geopolitical tensions. The company had previously cautioned that modest growth was expected in this area due to declining visitor numbers from abroad. Despite these headwinds, domestic park attendance and guest spending remained healthy, with D'Amaro emphasizing the resilience of the Experiences division.
TikTok partnership expands Disney+ content
In a separate announcement, Disney revealed a global short-form content sharing deal with TikTok, which will integrate Disney-focused fan-created content into the Disney+ app. The partnership aims to enhance fan engagement and cross-platform content distribution.
Outlook and future guidance
Disney reaffirmed its expectations for 12% adjusted earnings growth in 2026 and double-digit adjusted earnings growth in 2027, signaling confidence in its strategic direction under D'Amaro's leadership. The company also expects operating income of roughly $4.9 billion in the current quarter.