Josh D’Amaro, the new CEO of Walt Disney Co., outlined the company’s strategy on Wednesday. His focus remains on maintaining creative excellence, enhancing the streaming service, capitalizing on live sports, and continuing investment in theme parks and cruise lines.
“Improving the consumer experience and fostering engagement are still our priorities, as we aim for a sustainable growth model,” D’Amaro conveyed during his inaugural earnings call as CEO.
This announcement buoyed Disney shares, which rose nearly 8% in early trading.
D’Amaro, who took over from Bob Iger in mid-March, is now guiding Disney through shifts in consumer behavior towards streaming, the rise of AI’s influence on media, and economic challenges impacted by soaring oil prices.
In a detailed letter to shareholders, he forecasted a 12% adjusted EPS growth for the 2026 fiscal year, which wraps up in early October. Disney had previously anticipated “double-digit” growth for that time frame. D’Amaro reinforced expectations for double-digit adjusted EPS growth in the following fiscal year as well.
The entertainment giant reported adjusted earnings of $1.57 per share with total revenue reaching $25.2 billion for the January to March period. Analysts had estimated adjusted EPS of $1.49 alongside revenues of $24.78 billion.
The Experiences segment, encompassing parks, cruises, and consumer products, observed a 5% uptick in operating profit for the last quarter. Increased spending by guests at U.S. theme parks and cruise lines was well noted compared to the previous year.
However, Chief Financial Officer Hugh Johnston mentioned a dip in attendance at domestic theme parks. This decline can be linked to fewer international visitors and competition from Universal’s new Epic Universe in Orlando. He did express optimism for growth later in the year.
Johnston also acknowledged the uncertain economic landscape, indicating that rising fuel prices could influence consumer habits, and further spikes might necessitate adjustments in strategy.
Operating profit from the entertainment sector increased by 6% to $1.34 billion. This rise was reinforced by higher subscription and advertising revenues from services like Disney+, alongside contributions from last year’s film successes such as Zootopia 2 and Avatar: Fire and Ash.
On the other hand, the sports division, which includes ESPN, saw a 5% drop in operating profit to $652 million, with increasing costs related to sports rights and production compared to the last year.
Johnston commented that investors should view Disney’s television networks, including ESPN, as brands that have studios, like “The Bear,” capable of producing content for broader distribution and monetization. While streaming now generates double the revenue of traditional TV for Disney, this revenue is shrinking consistently each quarter.
Regarding the role of artificial intelligence, D’Amaro expressed that while AI presents a “significant long-term opportunity” for increasing production efficiency, human creativity will remain at the core of Disney’s endeavors.
