Disney beats profit forecasts as ‘Toy Story 5’ boosts streaming, merchandise and theme park growth

Los Angeles: Walt Disney Co. reported better-than-expected quarterly earnings as the blockbuster success of 'Toy Story 5' drove growth across its entertainment, streaming, merchandise and theme park businesses. The company said revenue for the quarter ended June reached $25.2 billion, up 7% from a year earlier, while adjusted earnings per share rose 28% to $2.06, exceeding analysts' expectations of $1.86 per share. Disney's shares climbed 4.6% in premarket trading following the results announcement. Chief Executive Officer Josh D'Amaro, who took over in March, highlighted the company's strategy of leveraging major franchises beyond cinema releases to generate revenue across multiple business segments. 'Toy Story 5' drives growth Disney said the success of 'Toy Story 5' extended well beyond box office receipts, contributing to increased merchandise sales, stronger engagement on the Disney+ streaming platform and higher attendance at its theme parks. The company's Entertainment division generated $11.3 billion in revenue, up 6% year-on-year, supported by the film's performance and a 15% increase in subscription revenue from Disney+ and Hulu. Operating income for the segment surged 64% to nearly $1.7 billion. In a separate announcement, Disney and TikTok unveiled a new partnership that will allow TikTok creators to use Disney film and television characters and scenes in short-form videos, marking the first agreement of its kind between the social media platform and a traditional media company. Theme parks continue strong momentum Disney's Parks, Experiences and Products division reported revenue of nearly $10 billion, an increase of 10% from the same quarter last year. Global theme park attendance rose 4%, while attendance at domestic US parks increased 3% despite concerns across the industry about weaker consumer sentiment and higher fuel costs. Operating income for the division climbed 20% to $3 billion. The company said results were partly supported by a $100 million tariff refund received earlier in the quarter following a US Supreme Court ruling that struck down former President Donald Trump's global tariff measures. Sports business faces playoff impact Disney's Sports division generated $4.5 billion in quarterly revenue, although operating income fell 17% to $858 million. The decline was attributed in part to shorter-than-expected early rounds of the NBA playoffs, where multiple series ended in four-game sweeps, reducing broadcast-related revenue opportunities. Share buybacks expanded Disney also announced the sale of its 50% stake in A+E Global Media to co-owner Hearst Corporation. The transaction is expected to generate approximately $1.2 billion in cash proceeds, which Disney plans to use for share repurchases. As a result, Disney increased its fiscal 2026 share buyback target to at least $9 billion. Outlook remains positive The company expects fourth-quarter segment operating income of $4.9 billion, driven by continued strength in its parks and experiences business. However, Disney cautioned that the weaker-than-expected box office performance of its live-action adaptation of "Moana" is likely to weigh on entertainment segment results during the current quarter. Despite that challenge, the strong performance of 'Toy Story 5', growing streaming revenues and resilient theme park attendance helped Disney deliver another solid quarter as it continues to expand its global entertainment ecosystem.