Disney’s parks division’s first-quarter results show it still has room to run

All is well at the Magic Kingdom, and at all the other Disney theme parks as well.

The company’s Experiences division, which includes parks, cruise ships, hotels and consumer products, posted record revenues for the fiscal first quarter, exceeding $10 billion for the first time in Disney’s more than 100-year history. It also announced operating income of $3.3 billion, an increase of 6% over the same period last year.

Growth in this sector has picked up significantly in the wake of the Covid pandemic. It often represents the lion’s share of a company’s profits. For the period ending December 27, experiences represented 38% of Disney’s total revenue, yet generated a whopping 71% of its operating income.

Company executives expect those good times to continue, anticipating high single-digit growth in operating income for the segment for fiscal 2026.

“When you look at the footprint of the business today, it has never been more broad or diverse,” Disney CEO Bob Iger said during Monday’s earnings call. “And the projects we are implementing will make it even more important.”

The parks’ strong performance comes on the back of a CEO succession contest that could see Disney Experiences chief Josh D’Amaro take Iger’s place. Disney’s board meets this week and is expected to vote on the next CEO, according to people familiar with the matter who spoke on the condition of anonymity about internal matters.

Industry insiders and Disney sources expect D’Amaro to be named Iger’s successor, although the decision ultimately rests with Disney’s board of directors and will not be final until a directors vote.

A Disney spokesperson said in a statement: “The Board of Directors has not yet selected the next CEO of The Walt Disney Company, and once that decision is made, we will announce it,” declining to comment on the timing of the next Board of Directors meeting.

Much of the Experiences division’s success comes from significant investments to expand the scope of Disney’s theme parks, renovate existing rides and themed areas in its parks, add cruise ships to its fleet and grow its presence in digital rides. This new development of the sector is fueled by Disney’s library of iconic franchises and intellectual properties.

Disney has long since pulled back from its content lineup. Disneyland opened its doors more than 70 years ago with rides inspired by the films “Alice in Wonderland,” “The Adventures of Ichabod and Mr. Toad,” “Peter Pan” and “Snow White.”

While these classic attractions remain, the company’s more recent developments have been boosted by Iger’s strategic acquisitions of four major film studios – Pixar in 2006, Marvel in 2009, Lucasfilm in 2012, and 20th Century Fox in 2019. This has brought coveted franchises under the House of Mouse’s roof, including Star Wars, Toy Story, The Avengers, and Avatar.

“As we added intellectual property to our stable…we were able to access intellectual property that had real value in terms of parks and resorts, and enabled us to rely on more capital spending because of the level of confidence we had in improving returns,” Iger said.

Obtaining the film and television rights to these properties gives the company more control over production and how that translates into rides, experiences and merchandise.

This work continues as part of a 10-year, $60 billion investment effort launched in 2023.

“We have expansion projects underway at each of our theme parks,” Iger said.

He promoted the upcoming opening of Frozen World at Disneyland Paris and the launch of a new cruise ship, Disney Adventure, which will dock in Asia.

Also on the horizon is a new Villain Land coming to Magic Kingdom as well as the reconfiguration of “Rivers of America,” “Tom Sawyer Island” and “Liberty Square Riverboat” into an area called “Piston Peak” — a second Cars-themed land modeled after the nature parks of America. At Hollywood Studios there will be a new “Monsters Inc.” Land as the Muppets take over the Rock ‘n’ Roller Coaster attraction. Animal Kingdom will host the “Encanto” ride and a new Indiana Jones ride.

At Disneyland, Avengers Campus, the Marvel-themed area, will get two new attractions, guests will get a glimpse of the Land of the Dead from “Coco” and Disney will build a new Avatar Zone inspired by the scene in “Avatar: Fire and Ash.”

Internationally, Disney has concluded a deal to bring a new theme park and resort to Yas Island in the United Arab Emirates.

The company’s commitment to bringing beloved intellectual property to its parks is paying off, according to Iger, especially outside the U.S.

“The percentage of people who go to Shanghai Disneyland just to go to Zootopialand is very high,” he said on Monday.

Global theme parks and experiences revenue rose 7% during the fiscal first quarter to $1.75 billion.

Of course, the company still faces headwinds from a decline in international visitors to its domestic parks.

It’s a trend that many theme park destinations in America are dealing with, with total tourism to the US down 6% in 2025. Industry analysts point to rising travel costs and fees, ongoing trade frictions and geopolitical anxiety due to declining demand for travel in the US.

Despite this, domestic theme parks and experiences revenue grew 7% during the quarter to $6.91 billion.

New offerings at Disney’s international parks, the launch of a cruise ship serving Asia and a new Abu Dhabi theme park are all ways Disney can tap into that overseas market and engage with consumers who don’t make the trip to the company’s domestic destinations.

— CNBC’s Julia Boorstin and Alex Sherman contributed to this report.