Disney+ Hits Major Profit Milestone as Disney Reshuffles Its Strategy
Disney is making major changes to the way it organizes its business after reporting strong growth from its streaming services and announcing a new plan to move much of its consumer products division closer to its movie and TV studios.
The company shared its latest financial results for the June 2026 quarter on Wednesday, with Disney CEO Josh D’Amaro saying the move is designed to help the company better connect its merchandise business with the entertainment projects that create its biggest franchises.
Starting in the first quarter of fiscal 2027, Disney will move a large part of its consumer products business from the Disney Experiences division into the entertainment unit. This means merchandise connected to movies and shows, such as products based on Marvel, Pixar, and Star Wars releases, will be counted closer to the studios that created those properties.
In a letter to shareholders, D’Amaro explained that the change should improve how Disney manages and measures the value of its intellectual property.
“We believe this shift will have strategic and operational benefits by bringing the monetization of our IP through consumer products closer to the studios that create that IP,” D’Amaro wrote. “Additionally, we believe this presentation will better reflect the returns our Entertainment segment is generating from the content it produces and make our Entertainment segment more comparable to peer reporting methodologies.”
The company’s consumer products business brought in $1.1 billion in revenue during the quarter, marking its strongest year-over-year growth in five years.
Disney also saw major improvements in its streaming business. Revenue from Disney+ and Hulu increased 11% compared with the same period last year, reaching $5.53 billion. Operating income for the streaming division more than doubled, rising from $329 million to $712 million.
The company said streaming subscription revenue grew 15% to $4.7 billion, while advertising revenue increased by 3%. Disney no longer reports subscriber numbers every quarter, focusing instead on financial performance from its streaming platforms.
Disney’s overall results were also stronger compared with last year. The company reported $25.2 billion in revenue and $2.63 billion in net income for the quarter. Revenue increased 7% year over year, while total segment operating income reached $5.6 billion, up 21%.
The company continued to highlight the success of Toy Story 5, saying the movie helped push the entire franchise past $4 billion in worldwide box office earnings. Disney also said the Toy Story franchise has reached more than 2 billion hours streamed on Disney+ and helped drive record consumer product sales.
While some recent movies did not perform as expected, Disney admitted that Star Wars: The Mandalorian and Grogu and the live-action Moana remake fell below box office expectations.
Disney Experiences, which includes theme parks and cruises, also had a strong quarter. The division generated $10 billion in revenue, up 10%, while operating income increased 20% to $3 billion. Domestic park attendance rose 3%, with Disney World having a particularly strong period thanks to more local visitors, annual passholders, promotions, and new attractions.
D’Amaro also discussed Disney’s growing use of artificial intelligence. He said more than 2,000 Imagineers now have access to Disney’s J.A.R.V.I.S. AI tool, which uses the company’s decades of creative knowledge to help design attractions and improve guest experiences.
“We made our J.A.R.V.I.S. AI tool available to our more than 2,000 Imagineers earlier this year, giving them instant access to over 70 years of institutional knowledge,” D’Amaro said.
Disney also confirmed plans to increase stock buybacks to at least $9 billion this year after selling its stake in A+E Global Media.
Along with the earnings report, Disney announced a partnership with TikTok that will allow creators to make videos using Disney characters and stories. The videos will appear on TikTok and Disney+ through the company’s vertical video feature.
D’Amaro said Disney remains focused on cutting costs while continuing to invest in future growth. The CEO believes the company’s mix of movies, streaming, theme parks, and popular franchises puts Disney in a strong position moving forward.
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