Disney+ Achieves Major Profit Milestone as Disney Restructures Its Strategy

Disney is undergoing significant changes in its business organization following impressive growth from its streaming services. The company has announced a new strategy to align its consumer products division more closely with its movie and TV studios.

In its latest financial report for the June 2026 quarter, Disney CEO Josh D’Amaro indicated that this restructuring aims to enhance the connection between merchandise and the entertainment projects that drive its most successful franchises.

Beginning in the first quarter of fiscal 2027, Disney plans to transfer a substantial portion of its consumer products business from the Disney Experiences division to the entertainment unit. This shift means that merchandise linked to films and shows, including products related to Marvel, Pixar, and Star Wars, will be more closely associated with the studios that developed those properties.

In a letter to shareholders, D’Amaro elaborated that this change is expected to improve how Disney manages and assesses the value of its intellectual property.

“We believe this shift will have strategic and operational benefits by bringing the monetization of our IP through consumer products closer to the studios that create that IP,” D’Amaro stated. “Additionally, we believe this presentation will better reflect the returns our Entertainment segment is generating from the content it produces and make our Entertainment segment more comparable to peer reporting methodologies.”

During the quarter, Disney’s consumer products division generated $1.1 billion in revenue, marking its strongest year-over-year growth in five years.

The company also reported significant advancements in its streaming sector. Revenue from Disney+ and Hulu rose by 11% compared to the same period last year, reaching $5.53 billion. Operating income for the streaming division more than doubled, increasing from $329 million to $712 million.

Disney reported that streaming subscription revenue grew by 15% to $4.7 billion, while advertising revenue saw a 3% increase. The company has shifted its focus from reporting subscriber numbers quarterly to emphasizing financial performance from its streaming platforms.

Overall, Disney’s results were stronger compared to the previous year, with the company reporting $25.2 billion in revenue and $2.63 billion in net income for the quarter. Revenue increased by 7% year over year, and total segment operating income rose by 21% to $5.6 billion.

Disney highlighted the success of ‘Toy Story 5’, noting that the film contributed to the franchise surpassing $4 billion in global box office earnings. Additionally, the ‘Toy Story’ franchise has accumulated over 2 billion hours streamed on Disney+ and has driven record sales in consumer products.

Despite some recent films underperforming, Disney acknowledged that ‘Star Wars: The Mandalorian and Grogu’ and the live-action ‘Moana’ remake did not meet box office expectations.

Disney Experiences, which encompasses theme parks and cruises, also enjoyed a robust quarter, generating $10 billion in revenue—up 10%—with operating income increasing by 20% to $3 billion. Domestic park attendance rose by 3%, with Disney World experiencing a particularly strong period due to increased local visitors, annual passholders, promotions, and new attractions.

D’Amaro also discussed Disney’s expanding use of artificial intelligence, revealing that over 2,000 Imagineers now have access to Disney’s J.A.R.V.I.S. AI tool, which leverages the company’s extensive creative history to enhance attraction design and guest experiences.

“We made our J.A.R.V.I.S. AI tool available to our more than 2,000 Imagineers earlier this year, giving them instant access to over 70 years of institutional knowledge,” D’Amaro noted.

Disney confirmed plans to boost stock buybacks to at least $9 billion this year following the sale of its stake in A+E Global Media.

Alongside the earnings report, Disney announced a partnership with TikTok that will enable creators to produce videos featuring Disney characters and stories. These videos will be showcased on TikTok and Disney+ through the company’s vertical video feature.

D’Amaro emphasized that Disney remains committed to reducing costs while continuing to invest in future growth. He believes the company’s blend of movies, streaming, theme parks, and beloved franchises positions Disney favorably for the future.

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