Walt Disney Company Merchandise Revenues Increase
The Walt Disney Company has released its quarterly earnings for its second fiscal quarter ended March 31, 2018. Which have shown another increase in revenue this quarter for Disney, which has gone from $13.336 billion to $14.548 billion — an improvement of 9% compared to last quarter.
While the merchandise division saw its revenues an increase of 2% overall, this was much less than the Parks & Resorts, Studios and Media divisions.
“Our ability to create extraordinary content like Black Panther and Avengers: Infinity War and leverage it across all business units, the unique value proposition we’re creating for consumers with our DTC platforms, and our recent reorganization strengthen our confidence that we are very well positioned for future growth.” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company.
Here are the details on the Consumer Products and Interactive division:
Consumer Products & Interactive Media revenues increased 2% to $1.1 billion and segment operating income decreased 4% to $354 million as higher income from licensing activities was more than offset by a decrease in comparable retail store sales and an unfavorable foreign currency impact.
The increase in income from licensing was due to higher minimum guarantee shortfall recognition and increased sponsorship revenue, partially offset by a decrease in settlements and lower licensing revenue from sales of merchandise and games. Higher minimum guarantee shortfall recognition was due to a favorable timing impact. Shortfalls are generally recognized at the end of the contract period. For contracts that ended on December 31, shortfalls were recognized in the second quarter of the current year whereas they were recognized in the first quarter of the prior year.
Disney also announced some details on its home video division:
Growth at home entertainment was driven by higher average net effective pricing and an increase in unit sales, both of which reflected the successful release of Star Wars: The Last Jedi. Higher unit sales reflected the DVD/Blu-ray release of Star Wars: The Last Jedi in the current quarter whereas the DVD/Blu-ray release of Rogue One: A Star Wars Story occurred in the prior-year third quarter. Other significant titles included Thor: Ragnarok and Coco in the current quarter compared to Moana and Doctor Strange in the prior-year quarter.
And the Parks and Resorts revenues for the quarter increased due to increased spending on merchandise.
Recently Disney announced a restructuring of its divisions, however that won’t take place until next year.