STar Wars
Consumer Products

The Force drives record-breaking quarter for Disney

The astounding success of Star Wars: The Force Awakens continues to reveal itself in the bottom lines of entertainment companies, the latest being Disney, which has posted record-breaking quarterly earnings of US$2.9 billion for Q1 2016.
February 10, 2016

The astounding success of Star Wars: The Force Awakens continues to reveal itself in the bottom lines of entertainment companies, the latest being Disney, which has posted record-breaking quarterly earnings of US$2.9 billion for Q1 2016, which ended January 2.

It marks a 32% increase over the US$2.2 billion that the company earned during Q1 2015.

Thanks to Star Wars and its vast-reaching retail viability, the company saw record quarterly operating income at both its Studio Entertainment and Consumer Products & Interactive Media groups, which grew by 86% and 23%, respectively.

Disney’s revenues for the quarter were US$15.2 billion, a 14% jump up from US$13.4 billion in revenues over the same period last year.

The Studio Entertainment group saw the highest uptick in revenues, which grew by 46% to US$2.7 billion. It’s 86% increase in operating income was due to an increase in theatrical distribution results, a higher revenue share with the Consumer Products & Interactive Media segment, growth in TV/SVOD distribution and increased home entertainment results. The increase in theatrical distribution results and higher revenue share with the Consumer Products & Interactive Media segment were due to the strong performance of Star Wars: The Force Awakens during the quarter.

Higher TV/SVOD distribution results were driven by international growth, while the increase in home entertainment results was due to sales of Star Wars Classic titles.

In starting to see the impact of a well-oiled Star Wars retail program, sales within Consumer Products & Interactive Media clocked in at US$1.9 billion – an 8% increase, compared to Q1 2015. Within Games, growth was thanks to higher licensing revenue from the success of Star Wars: Battlefront, which was offset by lower Disney Infinity results that were affected by higher inventory reserves and lower unit sales volume. The decrease at Retail was due to lower comparable store sales and margins in Europe and North America, as well as the company’s online business in North America, reflecting strong sales of merchandise based on Frozen in the prior-year quarter, partially offset by quarter sales of Star Wars merchandise.

Media Networks revenues for the quarter increased 8% to US$6.3 billion, reflecting higher ad and affiliate revenues, and segment operating income decreased 6% to US$1.4 billion. Ad revenue growth was driven by an increase in units sold and higher rates, partially offset by lower ratings. Within Media Networks, Cable Networks revenues for the quarter increased 9% to US$4.5 billion and operating income decreased 5% to US$1.2 billion due to a decrease at ESPN and lower equity income from A&E, which was partially offset by growth within the domestic Disney Channels.

Parks and Resorts revenues for the quarter increased 9% to US$4.3 billion and segment operating income increased 22% to US$981 million. While park attendance on a domestic level was high, international operations fell short due to higher operating costs and lower attendance at Disneyland Paris, as well as higher pre-opening expenses at Shanghai Disney Resort.

 

About The Author
Wendy is Kidscreen’s Associate Editor. When she’s not sourcing material for the brand's daily email newsletter, she’s researching, writing and connecting with others about the newest trends in digital media. Contact Wendy at wgoldman@brunico.com.

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