Disney Shows Consumer Product Declines Amid Tough Comparisons on Star Wars, Frozen
Faced with daunting comparisons to the year-earlier quarter that was highlighted by sales related to both Star Wars: Episode VII – The Force Awakens and Frozen, Disney’s Consumer Products and Interactive Media segment showed declines in both revenue and operating income in the company’s first quarter ended December 31.
The segment’s revenue for the quarter was off 22.7% percent to $1.48 billion, while operating income dropped 25.5 percent to $642 million.
Disney said that results for its merchandise licensing business also were hit by unfavorable currency exchange rates “partially offset by higher minimum guarantee shortfall recognition.” The Disney Stores, also included in the segments results, saw sales of Moana merchandise partially offsetting declines in Star Wars and Frozen products.
Overall, Disney a 3 percent decline in revenue to $14.78 billion as net income dropped 14% to $2.48 billion. The company’s biggest bright spot was Parks and Resorts, where revenue increased 6 percent to $4.56 billion and operating income rose 13 percent to $1.11 billion.
Disney executives said they expect consumer product sales will likely be down in the first half of the year, but rally to post “strong growth” in Q3 and Q4 led by merchandise tied to Cars 3 and Spiderman films.