Disney Experiences and Streaming Drive Strong Q3 Results
Walt Disney's (DIS) third-quarter sales growth and operating margin expansion were driven by its experiences and streaming businesses, according to Morningstar.
The company reported a 7% increase in revenue and a 3 percentage point expansion in operating margin compared to the prior year. Free cash flow remained strong at $3 billion.
Experiences, which account for 40% of third-quarter revenue and 54% of operating profit, saw sales rise 10%. This growth was led by domestic patrons at US parks and new cruise ships, offsetting a slowdown in Asia and still-depressed international visitors to US parks.
Morningstar estimates that the experiences operating margin expanded by 2 percentage points due to operating leverage and revenue mix. The company expects experiences to accelerate as the economic backdrop improves, with new attractions and cruise ships on the way.