Walt Disney Co Q2 FY2026 earnings call

First, creative excellence remains at the center. Second, deepening the direct relationship with fans across streaming, sports, games, and experiences with Disney Plus central. Third, technology as a powerful accelerant. Disney Experiences demonstrates strength in core business and makes progress against growth initiatives. ESPN enhances its offering for fans. Executing with focus, delivering against commitments and investing in long-term value areas. Strategic priorities include creating best-in-class content, strengthening streaming businesses, leveraging live sports for ESPN's direct-to-consumer business, and turbocharging Disney experiences globally.

During the quarter, Disney Experiences had strong revenue growth of 7% and segment operating income growth of 5%, both representing second quarter records. ESPN continues to build toward a stronger direct-to-consumer future. For parks, domestic parks attendance trends are expected to improve in Q3 compared to Q2. Disney Cruise Line launched the Disney Adventure in Asia, and Disneyland Paris opened World of Frozen. Global guests (aggregating domestic and international parks attendance along with passenger cruise days) grew more than 2% in Q2.

Expect attendance trends at domestic parks to improve in Q3 compared to Q2. ESPN continues building toward a stronger direct-to-consumer future. Adjusted EPS is expected to grow 12% for fiscal 26 and double digit for fiscal 27, excluding the impact of the 53rd week. Forward bookings for experiences are very encouraging for the rest of the year.

Near-term variability in business performance. Potential impact of significant further rise in fuel prices on consumer behavior, although currently not seeing material impact on the remainder of the fiscal year based on forward bookings.

Q: What are the three biggest priorities going forward?

A: First, creating best-in-class content. Second, strengthening streaming businesses and driving top line growth and profitability. Third, continuing to take advantage of live sports and build ESPN's direct-to-consumer business.

Q: How to replicate high LTV model within Disney Plus?

A: Build Disney Plus as the immersive, interactive digital centerpiece where pieces of the company become increasingly connected to change the lifetime value equation.

Q: Paths to organically grow engagement for Disney Plus domestically?

A: Content and product enhancements, including delivering exceptional content, improving product to reduce user friction and enhance discovery, and being selective with third-party distribution.

Q: What does digital centerpiece of Disney Plus imply?

A: It means Disney Plus becomes the primary relationship between Disney and its fans where everything converges.

Q: Update on capital expenditure investment program for experiences?

A: Excited about investments creating new experiences based on popular IP, World of Frozen in Paris had great guest response, many projects underway globally, CapEx in 26 includes new ship and expansions, and expecting attendance improvement in domestic parks in Q3.

Q: How to supercharge content division?

A: Invest in IP that breaks through and builds fan connections, continue betting on original stories and characters, consolidate creative engines under Disney Entertainment to streamline operations and unlock synergies.

Q: Does Disney believe in secular shift towards short form and user-generated content?

A: Yes, experimenting with short form content in various ways, focusing on IP in relevant social platforms and adjusting products to reflect consumer interaction.

Q: Weighing opportunity to engage with NFL now versus sitting on existing deal?

A: Relationship with NFL is broad, haven't engaged in early renewal conversations yet but willing to have conversations to find growth opportunities.

Q: Should investors expect differences in technology use?

A: Yes, greater interactive entertainment for Disney Plus subscribers, more personalized content feeds across streaming services, like SportsCenter for You.

Q: Where is Disney integrating generative AI?

A: Enhancing creativity, improving returns through efficient production and increased content volume, developing personalized recommendation engine, enhancing ad targeting, personalizing experience planning in parks, precision labor demand forecasting in theme parks, and enterprise operations efficiency.

Q: View on ESPN and linear networks?

A: Linear networks are brands with studios producing content monetized across platforms, Disney Entertainment as a segment is growing nicely, sports is a key part of programming strategy with ESPN as an important contributor.

Q: One Disney strength and non-core assets?

A: One Disney is about creating, distributing, engaging, and monetizing stories and brands across the company to increase consumer lifetime value. Evaluating non-core assets for strategic alternatives as marketplace and businesses evolve.

Q: Efficiency initiative and opportunity?

A: Working towards driving efficiency, right-sizing organization, shifting expense base to growth areas like content and technology, building a culture of efficiency and funding growth from existing expense base.

Q: Sports OI guidance and second quarter results?

A: Change in sports OI guidance due to NFL transaction, second quarter sports results better than expected due to slight revenue ahead and programming fees under.

Q: 53rd week impact by segment?

A: Impacts all segments, about a 4% overall uplift including revenue and margin.

Q: What drove better than expected park top line?

A: Broad-based core parks revenue growth, including stronger admissions, food and beverage, merch. No macro weakness seen currently, with benefit from Paris World of Frozen opening.