Disney’s diverse portfolio helped offset losses in one area with gains in another as the company announced growing revenues for the quarter and the year. The company’s streaming service Disney+ is still not profitable but has made significant progress in reducing losses – from nearly $1.5 billion to just $387 million this past quarter. With the acquisition of Hulu and plans for a single app to offer both Disney+ and Hulu content in the future, Disney is making steady progress towards profitability, with 7 million new Disney+ subscribers added this quarter and expectations of profitability in the latter part of 2024.
The Experiences division, including theme parks, resorts, and cruises, was a major profit driver for Disney, experiencing a 13% increase in revenue to $8.16 billion. However, Walt Disney World in Florida was the only site that did not perform well due to various factors including the end of anniversary celebrations and wage inflation. After agreeing to raise union workers’ pay to $18 per hour by the end of 2023, Disney acknowledged that this move would impact profits, but stated that employees had earned the right to be paid more. Additionally, Disney announced plans to “turbocharge” its parks, resorts, and cruises with a $60 billion investment.
Disney is also making efforts to take ESPN direct-to-consumer, with the company reporting that the sports network’s revenue has grown year over year. Though Disney is striving for growth, it also plans to “aggressively manage” costs, increasing its “efficiency target” by $2 billion. Despite navigating financial challenges, Disney remains confident in its ability to recover to pre-pandemic levels and is focused on moving “from a period of fixing to a period of building.”