Quarterly results and headline figures
Walt Disney exceeded Wall Street forecasts for its most recent quarter, reporting adjusted earnings-per-share of $1.57 and quarterly revenue of $25.2 billion for the January through March period. Analysts surveyed by LSEG had been looking for adjusted EPS of $1.49 and revenue of $24.78 billion.
Leadership transition and shareholder messaging
Josh D'Amaro, who took over as chief executive in mid-March, used a 10-page letter to shareholders to set expectations for the coming fiscal years and to outline priorities for the company. In that letter he said he expected adjusted EPS growth for fiscal 2026, which ends in early October, to be about 12%. The company had previously characterized growth for that period as in the "double digits." He also reiterated that Disney expects double-digit adjusted EPS growth for fiscal 2027.
In the same letter, D'Amaro described planned investments in entertainment content and theme park experiences and highlighted a role for technology in increasing revenue from storytelling. "We see a significant opportunity to engage and entertain our fans more deeply in both digital and physical environments," he wrote. He also noted the company was "mindful of the macroeconomic uncertainty consumers are facing" but said current demand at Disney's U.S. theme parks in Florida and California was "healthy."
Business segment performance
The experiences division, which includes parks, cruise ships and consumer products, delivered a 5% increase in operating income for the quarter. Disney said guests spent more at U.S. theme parks and that cruise ships saw higher volume compared with the same period a year earlier.
At the entertainment unit, operating income rose 6% to $1.34 billion. Disney attributed part of that improvement to higher subscription and advertising revenue from its streaming services, including Disney+. The company also noted that box-office contributors from films released last year, specifically "Zootopia 2" and "Avatar: Fire and Ash," continued to add to results during the quarter.
The sports division, which houses ESPN, recorded a 5% decline in operating income to $652 million. Disney said the division faced higher sports rights and production costs compared with a year earlier.
Strategy and near-term outlook
D'Amaro's letter stresses a combination of content investment, enhancements to physical experiences and technology deployment as the means to drive tighter engagement and revenue growth. The company has framed fiscal 2026 as a year where adjusted EPS growth should accelerate to about 12%, following the previously stated expectation of "double digits," and continues to target double-digit adjusted EPS growth in fiscal 2027.
Disney's reported results for the quarter show gains across its core consumer-facing businesses, with streaming subscription and advertising revenue helping entertainment margin expansion, and higher guest spending bolstering the experiences segment. At the same time, sports rights and production cost pressures weighed on the sports division's operating income.
What remains constrained to the record
The company flagged macroeconomic uncertainty as a consideration in consumer behavior, while reporting that current demand at its U.S. parks remains healthy. The sports division's profitability was reduced by increased rights and production costs year-over-year.