Key Takeaways
- “Toy Story 5” boosted Disney’s streaming, merchandise and theme park performance.
- Disney beat earnings expectations despite slightly missing quarterly revenue forecasts.
- Disney announced TikTok partnership and expanded its fiscal 2026 share buyback plan.
Disney reported stronger-than-expected quarterly Disney earnings after “Toy Story 5” boosted merchandise sales, Disney+ engagement and theme park attendance, while the company also announced a $1.2 billion media stake sale and a new partnership with TikTok.
Toy story franchise powers multiple businesses
Disney reported revenue of $25.2 billion for the June quarter, up 7% from a year earlier, though slightly below analysts’ expectations of $25.4 billion, according to LSEG. Adjusted Disney earnings rose 28% to $2.06 per share, exceeding Wall Street’s forecast of $1.86.
Shares of Disney climbed nearly 2% in midday trading following the earnings release.
The company said the success of “Toy Story 5” extended beyond theaters by increasing merchandise sales, driving engagement on the Disney+ streaming platform and attracting more visitors to Disney theme parks.
Chief Executive Officer Josh D’Amaro, who assumed the role in March, said Disney will continue investing in major franchises to reach audiences across multiple parts of its business.
“The success of ‘Toy Story 5’ demonstrates the strength of our franchise strategy beyond the box office,” D’Amaro said in the company’s shareholder letter.
Disney also announced an agreement with TikTok that allows creators to use Disney movie and television characters and scenes in short-form videos. The companies described it as the first partnership of its kind between a traditional media company and the social media platform.
Parks, streaming deliver strong growth
Disney’s parks and experiences division generated nearly $10 billion in revenue during the quarter, an increase of 10% from a year earlier. Global theme park attendance rose 4%, while attendance at domestic parks increased 3%.
Operating income for the parks business climbed 20% to $3 billion. Disney said results included a $100 million tariff refund issued after the U.S. Supreme Court struck down President Donald Trump’s global tariffs.
The entertainment division posted revenue of $11.3 billion, up 6% from the same period last year. Operating income increased 64% to nearly $1.7 billion, supported by the performance of “Toy Story 5” and a 15% increase in subscription fees for Disney+ and Hulu.
D’Amaro told investors Disney+ will continue expanding with games, merchandise and other digital experiences. He also said the company is evaluating a free streaming option aimed at attracting price-sensitive consumers who could later become paid subscribers.
Disney reshapes portfolio, eyes future growth
Disney said it will sell its 50% stake in A+E Global Media to co-owner Hearst Corp. for estimated cash proceeds of $1.2 billion. The company plans to use the funds for share repurchases, increasing its fiscal 2026 buyback program to at least $9 billion.
Chief Financial Officer Hugh Johnston said Disney has already sold out its advertising inventory for Super Bowl LXI, scheduled for February.
The sports division reported quarterly revenue of $4.5 billion. Operating income fell 17% to $858 million because shorter NBA playoff series reduced the number of games available for broadcast.
Looking ahead, these Disney earnings suggest fourth-quarter segment operating income of $4.9 billion, supported by continued growth in its parks business. The company cautioned that weaker box office results for the live-action adaptation of “Moana” are expected to weigh on entertainment segment performance.
