Disney posts strong park profits even as consumers cut spending elsewhere
Americans still spend on Disney vacations as park revenue rises 9% (Illustrative photo: Getty Images)
Despite inflation worries and consumer cutbacks, Disney is seeing strong gains at its US theme parks, according to The New York Times.
In its winter quarter earnings, Disney reported a 13% increase in operating profit from its US theme parks, totaling $1.82 billion, with revenue rising 9% to $6.5 billion.
Despite Americans grappling with rising living costs, consumer interest in Disney vacations remains resilient.
The company saw higher attendance, stronger hotel bookings, and more guest spending across food and merchandise.
Hugh F. Johnston, Disney's CFO, described the current trend as "quite strong," highlighting that summer bookings are already 7% ahead of last year.
To fuel momentum, Disney rolled out aggressive seasonal discounts — such as multiday Florida resident passes for as low as $60 — and it appears to be working.
At the same time, Disney announced its seventh theme park resort, a new location in Abu Dhabi, marking a major international expansion.
CEO Bob Iger called the move "a huge endorsement of that location," citing the region's booming tourism industry.
Beyond the parks, Disney's streaming segment beat expectations. Disney+ gained 1.4 million new subscribers despite anticipated losses, reaching a total of 126 million.
The direct-to-consumer division, which includes Hulu, delivered $336 million in operating profit — up sharply from $47 million a year earlier.
However, the company's legacy TV segment continued to decline. Revenue dropped 13% to $2.4 billion due to falling ad sales and shrinking viewership.
ESPN's numbers also took a hit, with a 12% decline in operating income largely tied to rising costs and a write-down on the failed Venu sports streaming platform.
In theaters, successes like Mufasa: The Lion King were offset by underperformers such as Snow White.
How major companies started 2025
While Disney is gaining ground, other corporate giants are navigating 2025 with mixed results.
Tesla stumbled out of the gate with a sharp stock decline, vehicle sales at a three-year low, and investor concern over stalled innovation.
In contrast, Meta impressed Wall Street with strong ad revenue and major AI investments.
Coca-Cola managed to boost profits despite global tariff pressures and economic uncertainty.
McDonald's, however, is facing its steepest US sales slump since 2020, with same-store sales down 3.6% in the first quarter of 2025. The drop is driven by declining visits from middle-income consumers and rising anti-American sentiment in key international markets.
While many brands brace for turbulence in 2025, Disney's strong showing suggests that even in uncertain times, entertainment remain a high priority for consumers.
