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During its fiscal 2026 first quarter (ended Dec. 27), Walt Disney (NYSE: DIS) beat Wall Street estimates for revenue and earnings per share. Those headline numbers, however, mask a major milestone.
The company’s experiences segment reported $10 billion in Q1 revenue, up 6% year over year and the first time it hit the 11-figure mark. The top line represented 38% of Disney’s overall sales. And there were gains registered both domestically and internationally.
This segment includes the theme parks, cruise lines, and consumer products. It’s the avenue that brings Disney’s incredible intellectual property, from its characters to its story lines and franchises, to life in the physical world. This supports the wide moat.
From a profit perspective, experiences’ $3.3 billion in Q1 operating income accounted for 72% of the company’s total. This is by far the most lucrative part of the Disney empire. Besides its earnings power, this division benefits from its differentiation and huge barriers to entry. And it has proven pricing power.
And the experiences segment still has a long expansionary runway, at least based on the actions that Disney is taking. “We have expansion projects underway at every one of our theme parks,” CEO Bob Iger and CFO Hugh Johnston wrote in their earnings commentary.
Disney Cruise Line is also expanding its fleet. Next month, the business will launch its first ship based in Asia. There are five more ships set to be introduced after this fiscal year.
This is all part of management’s $60 billion 10-year investment that was announced in September 2023. The leadership team believes there are many years of growth left, as Disney targets fans across the world.
Investors received some much-needed clarity about who Bob Iger’s successor would be. Disney revealed that Josh D’Amaro, chairman of the experiences segment for more than five years, has been picked to take over the CEO position in March. D’Amaro has been with the company for 28 years.
