“Our focus remains steady — enhancing the consumer experience, fostering engagement, and building a robust and sustainable growth business,” D’Amaro stated during the company’s first-quarter earnings call, marking his initial presentation as Disney’s leader.
As a result, Disney’s stock rose nearly 8% in early trading.
D’Amaro took over from Bob Iger as Disney CEO in mid-March, guiding the company amid a consumer shift to streaming, the rise of artificial intelligence tools, and a tough economic landscape affected by rising oil prices and reduced international visitors to its parks.
In a 10-page letter to shareholders, D’Amaro projected adjusted EPS growth for fiscal 2026, concluding in early October, to be approximately 12%. The company had previously anticipated growth in the “double digits” for this period. He reaffirmed that Disney is aiming for double-digit adjusted EPS growth in fiscal 2027.
The entertainment giant reported adjusted earnings per share of $1.57 and revenues of $25.2 billion for the quarter from January to March. Analysts had, on average, expected adjusted EPS of $1.49 and revenue of $24.78 billion, based on LSEG data.
The experiences division, encompassing parks, cruise lines, and consumer products, experienced a 5% rise in operating income for the recent quarter. Guests spent more at U.S. theme parks, while cruise ships witnessed increased volumes compared to the same timeframe last year, according to Disney.
Disney CFO Hugh Johnston noted a drop in attendance at the company’s domestic theme parks, partly attributed to fewer international visitors and competition from Universal Epic Universe in Orlando, Florida. He anticipates growth in the latter half of the year.
Johnston acknowledged economic uncertainties, indicating that Disney is “not immune” to the effects of escalating gas prices, suggesting that a significant increase could shift consumer behavior.
In the entertainment unit, operating income grew by 6% to $1.34 billion, partially driven by increased subscription and advertising revenues from streaming services, including Disney+. Successful movie releases like “Zootopia 2” and “Avatar: Fire and Ash,” launched last year, continued to add to earnings throughout the quarter.
The sports division, which includes ESPN, experienced a 5% decline in operating income to $652 million, with Disney citing higher sports rights and production costs compared to the previous year.
Johnston emphasized that investors should view Disney’s television networks, notably ESPN, as brands with studios that produce widely distributable and monetizable content, such as “The Bear.” He mentioned that streaming now generates double the revenue of Disney’s traditional television operations, which are progressively diminishing each quarter.
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The sports division is still navigating this streaming transition, but Johnston pointed out that ESPN remains the largest sports media brand globally and continues to be “a vital contributor” to the company’s overall portfolio.
In discussing the implications of artificial intelligence, D’Amaro noted that the technology presents “meaningful long-term opportunities” for Disney, with potential to enhance production efficiency, while highlighting that human creativity will always be at the forefront of the company’s initiatives.
