LOS ANGELES, Feb 3, 2026, 06:16 PST
- Disney reported revenue gains and beat adjusted profit expectations, driven by strong performances in parks and streaming.
- The company flagged “international visitation headwinds” at its U.S. parks for the current quarter.
- Sports profit slipped following a YouTube TV blackout, and film and TV profit declined due to rising costs.
Walt Disney on Monday topped Wall Street’s adjusted earnings forecast but warned its theme parks segment will be held back by a decline in international visitors to the U.S.
This warning hits hard since parks and experiences are still Disney’s primary profit driver, fueling hefty investments in films, sports rights, and streaming. With cable TV shrinking and streaming locked in a tough battle over price and content, investors have been relying heavily on that division to keep profits afloat.
Disney’s “Experiences” segment — covering parks, cruises, and consumer products — heavily influences the stock’s performance. Ben Barringer, Quilter Cheviot’s head of technology research, pointed to the parks division as the main driver behind the recent share price drop, highlighting its significant role in Disney’s overall earnings. Reuters
Revenue climbed 5% to $25.98 billion for the quarter ending Dec. 27, 2025. Net income tied to Disney dropped to $2.40 billion, or $1.34 per share. Adjusted earnings per share eased to $1.63. “We are pleased with the start to our fiscal year,” CEO Bob Iger said in a statement. Thewaltdisneycompany
Experiences revenue hit a quarterly record of $10.01 billion, with operating income climbing 6% to $3.31 billion. Disney reported a 1% rise in domestic park attendance and a 4% boost in per-capita spending.
Disney warned investors to brace for only “modest” operating income growth in its Experiences segment for the fiscal second quarter. The company pointed to “international visitation headwinds” at its domestic parks, along with upfront costs tied to new cruise ships and a Frozen-themed attraction in Paris. On the earnings call, CFO Hugh Johnston said marketing efforts shifted more toward U.S. customers as international tourism weakened. Apnews
Disney’s Entertainment division, covering films, TV, and streaming, saw revenue climb 7% to $11.61 billion. Yet, operating income fell sharply, down 35% to $1.10 billion. The company pointed to rising costs in programming, production, and marketing that more than offset boosts from subscription and affiliate fees, plus stronger theatrical returns.
Streaming stood out in that segment. Disney reported its SVOD business—covering subscription video-on-demand services like Disney+ and Hulu—delivered $450 million in operating income, up from $261 million the previous year. Revenue increased 11% to $5.35 billion. Subscription fees jumped 13% to $4.42 billion, while advertising and other revenue grew 4% to $922 million.
In a joint statement, Iger and CFO Hugh Johnston highlighted the box-office successes of “Zootopia 2” and “Avatar: Fire and Ash,” noting both surpassed $1 billion worldwide. They also credited these franchises with boosting streaming views and theme park attendance. Thewaltdisneycompany
The Sports segment posted operating income of $191 million, slipping 23% compared to last year. Disney attributed roughly $110 million of that decline to a short-lived carriage dispute with YouTube TV, which temporarily pulled ESPN and ABC from the platform.
Cash flow took a hit. Operating cash dropped sharply to $735 million from $3.21 billion a year ago. Free cash flow turned negative, plunging to minus $2.28 billion as Disney ramped up capital expenditures and faced higher taxes. The company also noted increased spending on content.
Disney stuck to its full-year guidance, forecasting double-digit growth in adjusted earnings per share and projecting $19 billion in cash from operations. The company also confirmed plans to buy back $7 billion of stock in fiscal 2026 and anticipates SVOD operating income around $500 million this quarter.
The competitive pressure remains intense. Disney’s streaming efforts pit it head-to-head against bigger pure-play players such as Netflix. At the same time, its park expansion competes with Comcast’s Universal, which is also growing its theme-park presence and unveiling new attractions that continue to boost attendance.
Plenty could still trip up Disney. Should international travel slip further, it would hit the very business that drove most of the segment’s profit this quarter. On top of that, a packed film schedule and climbing sports rights expenses could squeeze margins. Cash flow remains tricky too, vulnerable to when taxes come due and the timing of major capital investments.
