The Walt Disney Company has surpassed Wall Street expectations with impressive financial results for its first fiscal quarter. Ending December 27, the entertainment giant reported a substantial $26 billion in revenue, marking a 5% increase compared to the previous year and exceeding analyst forecasts of $25.7 billion.
Driving this growth were Disney”s theme parks, which generated $10 billion in revenue and accounted for 72% of the company”s total operating profit, which approached $5 billion. The parks enjoyed a resurgence, particularly as Walt Disney World rebounded from the impact of Hurricane Milton, which had caused closures during the same quarter last year. Notably, domestic attendance rose by 1%, and guest spending per capita increased by 4%. Additionally, the cruise line sector saw favorable results, aided by the introduction of a new ship.
On the streaming front, Disney”s performance was equally robust. The operating income from its streaming services, including Disney+ and Hulu, soared by 72% to reach $450 million, significantly outpacing expectations. The company”s CFO, Hugh Johnston, highlighted the strong viewer interest in classic titles like “Avatar” and “Zootopia,” both of which have sequels that debuted in 2025. Moreover, bundling options that included ESPN helped maintain lower cancellation rates among subscribers.
However, Disney”s sports division faced challenges during this quarter, as operating income fell by 23% to $191 million despite a slight revenue increase to $4.9 billion. A significant factor was a blackout involving YouTube TV, which incurred a cost of $110 million for Disney due to a 15-day dispute over rates that left millions without access to ESPN and other channels. The overall increase in programming costs and fewer regular-season NBA games also contributed to the decline.
The entertainment segment, while generating $11.6 billion in revenue—up 7% year-over-year—saw a 35% decrease in operating profit, primarily due to increased marketing expenditures. Disney had promoted nine films during the holiday season, compared to just four the previous year, with high marketing costs attributed to major releases like “Avatar: Fire and Ash,” which debuted in the final week of the quarter.
Looking ahead, Disney reaffirmed its full-year outlook, projecting double-digit earnings growth per share and anticipating $19 billion in cash from operations. Share buybacks are also expected to continue, with plans for $7 billion in repurchases. Following this announcement, Disney shares experienced a slight dip of about 2% in premarket trading.
The company is also preparing to name a successor to former CEO Bob Iger, with Josh D”Amaro, the chairman of Disney Experiences, considered the front-runner for the position. In light of recent developments, Disney plans to adjust its marketing strategies to attract more domestic visitors to its parks, especially as international tourism shows signs of slowing down.
