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Published : 02 Feb 2026, 11:26 PM
Walt Disney's warning that a decline in international visitors to its US theme parks and a slump in earnings at its TV and film division sent shares down nearly 5 percent in trading on Monday, just as it readies a successor to outgoing CEO Bob Iger.
The company said there were "headwinds" among international visitors without giving a reason at a time when foreign travel to the United States has been waning. CFO Hugh Johnston added that Disney is focusing promotional efforts on US consumers, as it has "less visibility" into international visitors.
Disney's entertainment unit, which includes the company's film studios, television networks and streaming services, reported a 35% drop in operating profit due to the cost of marketing a heavy slate of theatrical releases that included box-office hits "Zootopia 2" and “Avatar: Fire and Ash."
Disney also stopped disclosing revenue and operating income for its TV channels. Johnston said it was “no longer relevant” in a world where entertainment is distributed broadly.
"The share price drop is very much to do with the parks business," said Ben Barringer, head of technology research at Quilter Cheviot. "Its size means it ultimately matters more and thus will move the market.”
The media and entertainment giant is expected to name a new chief executive to replace Iger early this year. Hollywood executives believe Josh D'Amaro, the chairman of the experiences division, which includes the parks division, is the front-runner.
"In our view, succession has been an overhang on the shares recently," wrote Bank of America's Jessica Reif Ehrlich, noting press speculation that D'Amaro will be named the next CEO, which she said would be "well-received by the investment community" due to the overall performance of the experiences division.
Iger is set to step down at the end of the year. He said he is setting up the next chief executive to find opportunities to grow the company. “In the world that changes as much as it does, in some form or another trying to preserve the status quo was a mistake, and I'm certain that my successor will not do that,” he said.
The experiences unit, which includes Disney's parks, cruises and consumer products, carried the December quarter, generating $10 billion in revenue and 72% of the company's quarterly operating profit of nearly $5 billion.
US TRAVEL STRUGGLES
The United States registered a 6 percent drop in foreign visitors in 2025 even as global tourism generated a 6.7 percent rise in spending, according to WTTC, an industry group. Concerns including US anti-immigration policies pushed tourists to European countries such as Spain and France, as well as Japan.
The company's overall revenue rose 5 percent to $26 billion for its fiscal first quarter ended December 27. That topped the consensus revenue forecast of $25.7 billion, according to analysts surveyed by LSEG. Disney reported income before taxes of $3.7 billion, besting Wall Street's projection of $3.5 billion.
Adjusted per-share earnings fell to $1.63, down 7% from a year earlier but better than analysts' estimate of $1.57 per share.
Disney reaffirmed its full-year forecast of double-digit per-share earnings growth, compared with fiscal 2025. It estimates it will bring in $19 billion in cash from operations, and is on track to repurchase $7 billion in stock.
Disney and YouTube TV's two-week contract dispute, which resulted in millions of subscribers losing access to Disney-owned networks such as ESPN, produced a $110 million hit to the company's sports unit, which reported a 23% drop in operating income for the quarter.
Disney's streaming services, which include Disney+, Hulu and ESPN, reported a 72 percent spike in operating income to $450 million. Revenue rose to $4.4 billion, up 13 percent from a year ago. The company no longer reports the number of streaming subscribers.
