Attendance at Disney parks in the U.S. has fallen amid war in the Middle East

Disney reported a rare quarterly decline in attendance at its U.S. theme parks, The New York Times noted. Foreign tourists are less likely to visit the U.S. amid the war in the Middle East and rising airfares, the Financial Times notes. Nevertheless, the company's shares rose by 7% in trading on May 6 after the release of reports. The growth of securities was supported by an increase in income from streaming and positive revenue figures.

- In the second quarter of fiscal 2026 (the company's fiscal year ends at the end of March), attendance at Disney's U.S. parks fell 1 percent compared to the same period last year - mainly due to a decline in international tourists, the company said in a report, noting that it realized: customers are facing higher inflation and soaring energy prices amid war in the Middle East.

Long lines at passport control, rising prices for flights and anti-American sentiments have caused a decrease in the number of international tourists in the United States by 5.5% in 2025, according to the UN data on tourism, cited by the Financial Times. Against this background, Disney also reported a 1% decline in attendance at its theme parks in the U.S. at the end of the 2025 fiscal year (ended in the fall of 2025). September 2025 could be the least crowded month for Walt Disney World since pandemic 2021, Fox News wrote.

However, the decline in attendance at the parks in the U.S. over the past three months, the company has compensated by reallocating marketing budgets Disneyland and Walt Disney World from foreign markets to domestic markets, noted in an interview with the Wall Street Journal, Disney Chief Financial Officer Hugh Johnston. Against this background, despite aggressive promotions to attract guests, the average check per visitor began to grow, he said.

- As a result, revenue for Disney's Parks and Cruises division grew 7% in the second quarter of fiscal 2026 relative to the same period in 2025, to $9.5 billion, and total global attendance at Disney parks worldwide - including cruise ships - increased 2% over the same time. For the next quarter, the company forecasts a recovery in attendance at U.S. parks.

- The company's total revenue last quarter rose 7% year-on-year to $25.2 billion, slightly exceeding analysts' forecasts, the FT reported. Earnings per share excluding one-time gains and losses added 8% over the same period to $1.57, which was also above the $1.49 expected by Wall Street. Quarterly net income fell 30% from the same period last year to $2.25 billion, mainly due to a one-time tax benefit a year earlier, the WSJ specifies.

- Streaming was one of the main drivers of the company's growth in the final reporting period, the Associated Press notes: profits at Disney+ and Hulu soared 88% year-on-year to $582 million, driven by subscriber growth, higher subscription prices and improved advertising performance.

- Revenue at Disney's film and television division, meanwhile, rose 10% year-over-year to $11.7 billion. Disney's sports broadcasting division, ESPN, was under pressure: despite a 2% year-over-year increase in quarterly revenue to $4.6 billion, the channel's operating profit fell 5% due to high sports rights costs.

- The new head of Disney Josh D'Amaro, who took over the company in March of this year instead of Bob Iger, addressed shareholders for the first time in a letter following the results of the reporting period. From this message it follows that the central idea of D'Amaro's strategy is to turn Disney+ into a single digital hub for all of the company's businesses, writes WSJ. Also, Disney's new CEO reiterated his aspirations to increase the company's investment in new technologies, especially in video games. "Our goal remains unchanged - to improve the customer experience, deepen customer engagement and continue to build a healthy and more sustainable growth-oriented business," D'Amaro said during a conference call following the report(quoted by Reuters).

- Disney is also gearing up to release several films, including "The Mandalorean and Grogoo," "Toy Story 5" and "Moana," notes the Associated Press. "Movies that are part of major franchises like these strengthen our greatest strategic asset - intellectual property - and have fueled our streaming, consumer products, theme park entertainment and gaming businesses for years and generations," D'Amaro and Johnston said in a joint statement.

- On the artificial intelligence front, Disney "continues to explore possible commercial collaborations with OpenAI and other partners," according to a letter from the company's CEO. In March, Disney's deal with OpenAI fell through after the AI company shut down its Sora AI video creation tool, WSJ points out.

- Inside the company D'Amaro took a course on acceleration of processes and optimization: under his leadership, about 1,000 employees were cut - mainly in the united marketing division, writes WSJ.

- In addition, on April 29, the company faced scrutiny from the U.S. Federal Communications Commission - it initiated a review of the licenses of Disney-owned TV channel ABC amid a public confrontation between ABC host Jimmy Kimmel and U.S. President Donald Trump: the formal reason was Disney's diversity policy.

In trading on Ma. 6 - due to the success of its streaming service, as well as exceeding analysts' expectations of quarterly revenue - Disney shares rose by 8%, later they slowed down and eventually at the close of trading added a little more than 7%. Since the beginning of the year, the stock has lost more than 5%, while the S&P 500 index rose 6%.

Nevertheless, Wall Street analysts are mostly positive about the company's securities: most of them recommend Disney shares to buy: 28 out of 32 analysts give them Buy and Overweight ratings. Another four experts take a neutral position (rating Hold). There are no sell recommendations for Disney shares. Their average target price is $131, which suggests a potential upside of more than 21% relative to the last close.

This article was AI-translated and verified by a human editor