Disney Earnings Soar with ‘Toy Story 5’, Theme Parks & Streaming, Nets $100M Tariff Refund

In his inaugural full quarter as CEO of Disney, Josh D’Amaro delivered impressive results, buoyed by the success of Toy Story 5, increased theme park attendance, and a significant surge in streaming revenue, covering the three months ending in June.

Disney’s total operating income for the fiscal third quarter surged 21% to $5.6 billion, surpassing analyst predictions, along with a notable rise in adjusted EPS to $2.06 per share from $1.61.

The company’s revenue climbed 7% to $25.2 billion compared to the previous year.

Following this fiscal Q3 report, Disney confirmed it is selling its 50% stake in A+E Global Media to a Hearst affiliate for $1.2 billion in cash. The company is also restructuring, moving its consumer products segment from Experiences to Studios, and announced a new short-form content sharing collaboration with TikTok earlier today.

D’Amaro, who assumed leadership from Bob Iger in March, stated, “Our third quarter performance and outlook for the full year affirm our advantageous position. Our long-term investment in intellectual property has cultivated deep fan relationships, translating into robust financial performance. The growth in global visitors at Experiences, the box office and merchandise success of Toy Story 5, and enhanced ESPN viewership all contributed to broadening our consumer engagement this quarter.”

D’Amaro is scheduled to conduct a call with financial analysts at 8:30 am ET.

The Entertainment division led the way with a 64% increase in profit to $1.7 billion, on revenues of $11.3 billion, fueled by the blockbuster performance of Toy Story 5 which crossed $1 billion globally, and the release of The Devil Wears Prada 2.

While Star Wars: The Mandalorian and Grogu and the live-action Moana didn’t meet box office expectations, they contributed to other areas like new theme park attractions and merchandise sales.

“The live-action Moana is poised to perform well on Disney+, leveraging the success of the original movie and expanding the franchise, which includes three movies, a themed area in EPCOT, and a comprehensive global merchandise operation,” Disney noted.

Disney no longer reports its streaming subscriber numbers but highlighted that streaming operating income more than doubled to $712 million from $329 million, with revenue up 11% to $5.5 billion. Subscription fees increased by 15%, supported by more subscribers and higher rates.

Disney also introduced upcoming international content for Disney+, including the second season of Rivals in the U.K. and Ireland, The Perfect Crown in Korea, and Dear Killer Nannies in Latin America, aiming to triple its local original series offerings over the next three years.

“Our goal is to transform Disney+ into the digital core of the Walt Disney Company,” D’Amaro expressed in his letter, detailing plans for an integrated membership ecosystem to enhance engagement and retention, with new features starting in Spring 2027.

Globally, Disney+ saw a decrease in churn, and the company achieved a significant milestone in integrating Hulu and Disney+ user experiences.

The Experiences division reported a 20% increase in profits exceeding $3 billion, with revenues nearing $10 billion. Global visitor numbers and domestic park attendance both showed healthy increases. The company also noted a robust booking outlook.

This should alleviate investor concerns sparked by lower attendance reports from Universal’s domestic parks, as reported by Comcast last month.

Despite global economic fluctuations, Disney remains optimistic about visitor growth, especially with new attractions like the World of Frozen at Disneyland Paris.

The quarter also marked the first full operational period for Disney’s newest cruise ships, the Disney Destiny and Disney Adventure.

Additionally, Disney reported a $100 million tariff refund for the quarter, following a similar announcement from Apple.

The Sports division, led by ESPN, reported a 17% decline in profit to $853 million due to rising costs, despite generating $4.5 billion in revenue. The decline was attributed to contractual increases and the timing of rights cost recognition linked to the NBA contract renewal.

After making select ESPN content available on Disney+ in the U.S. in 2024 and then globally, the company plans to offer a more comprehensive range of games to subscribers starting this fall, including additional college football broadcasts.