Disney Is Dominating the 2019 Box Office

After capturing more than a quarter of the domestic box office last year, Disney is poised for an even more dominant performance in 2019.

Adam Levine-Weinberg
Adam Levine-Weinberg
Jun 29, 2019 at 10:09AM
Consumer Goods

In recent years, The Walt Disney Company (NYSE:DIS) has been the undisputed king of the U.S. box office. Disney has beaten No. 2 studio Warner Brothers -- now part of AT&T -- for three consecutive years, twice topping it by more than $1 billion. Last year, Disney brought in domestic box-office receipts of $3.1 billion, including $136 million from holdovers released in 2017, giving it 26% market share. Warner Brothers took second place with less than $2 billion.

Disney's recent acquisition of Fox's entertainment assets will tighten the company's stranglehold on the box office. But even excluding Fox, Disney is on track for an even more dominant box-office performance in 2019. Let's take a look.

Marvel gets Disney off to a great start

Of course, Disney's main box-office hit this year was Avengers: Endgame. The culmination of "Phase 3" of the Marvel Cinematic Universe took the U.S. (and most of the rest of the world) by storm in late April with a record domestic opening-weekend gross of $357 million.

Avengers: Endgame is still in theaters and had grossed more than $835 million in the U.S. as of Wednesday -- good for No. 2 all time behind Star Wars: The Force Awakens. A rerelease this weekend featuring some new post-credits material will likely drive a modest rebound in ticket sales, potentially helping to push the final domestic gross past $850 million. Globally, Avengers: Endgame has already grossed $2.75 billion.

A blurred image of people watching a film in a movie theater

Disney's latest Marvel movie has been a huge hit. Image source: Getty Images.

While it was eventually overshadowed by Endgame, Captain Marvel had already become a big hit earlier in the year. With a domestic gross of $427 million -- and a worldwide total of $1.13 billion -- it stands as the clear No. 2 movie year to date.

Two recent releases soar up the charts

Disney has continued its streak of success since late May. Its live-action remake of Aladdin had racked up $295 million at the domestic box office as of Wednesday -- good for third place year to date, behind Avengers: Endgame and Captain Marvel -- and continues to add to that total. (In fact, Aladdin has remained the No. 2 or No. 3 performer at the box office in recent days, despite being released more than a month ago.)

Aladdin has also performed well overseas, bringing in more than $500 million in its first month. It may not become a billion-dollar blockbuster like Avengers: Endgame and Captain Marvel, but it's on pace to end its run with a global box-office haul of at least $900 million.

The studio's momentum has continued over the past week with the release of Toy Story 4 on June 21. The latest installment in the popular Pixar franchise brought in $121 million domestically on opening weekend. (It also brought in $124 million abroad despite not opening in several major markets.) By the end of Wednesday, Toy Story 4 had grossed $168 million in the U.S.

The characters from Toy Story 4 in a scene from the film.

Image source: The Walt Disney Company.

With no major new releases coming this weekend -- and only one in the first half of July, Sony's Spider-Man: Far From Home -- Aladdin and Toy Story 4 should continue to climb up the domestic box-office charts in the weeks ahead. The former is on track to surpass $300 million this weekend and could top out near $350 million.

It's a little early to know where the latter will land, but Toy Story 3 grossed $415 million at the domestic box office with a smaller opening-weekend haul. Toy Story 4 has also received excellent reviews. This suggests that the film has a good chance to surpass $400 million domestically.

Between the four movies mentioned above and Dumbo -- which was a flop by Disney's standards, with a $114 million domestic box-office total -- Disney is already closing in on the $2 billion mark domestically for 2019. These five films account for more than a third of the domestic box office for the first half of the year. AT&T's Warner Brothers is in second place with $820 million, a figure that includes more than $200 million from holdover titles released in 2018.

More heavy hitters coming

Disney's run of box-office success in 2019 is far from over, with four more high-potential releases scheduled for the second half of the year.

First up is a live-action remake of The Lion King, which will hit theaters next month. The original film earned $313 million in the U.S. during its initial run in 1994 -- nearly $100 million more than the original Aladdin had grossed two years earlier. Thus, the new Lion King movie has a good chance to perform even better than Aladdin has.

In October, Disney will release Maleficent: Mistress of Evil, a follow-up to the 2014 film that grossed $241 million in the U.S. and more than $750 million globally. Frozen 2 will arrive in time for Thanksgiving. The original did $401 million in the U.S. and $1.28 billion globally in 2013. Finally, the last installment of the latest Star Wars trilogy will come out on Dec. 20. Star Wars: The Last Jedi brought in a "disappointing" $620 million domestic box-office haul two years ago, after Star Wars: The Force Awakens posted a record-setting $937 million total in the U.S. in 2015.

These movies may not all be box-office triumphs, given the mixed performance of sequels and franchise films recently. But Disney's track record suggests that it will have more successes than failures. As a result, its final domestic box-office haul for 2019 could be close to $4 billion -- without even counting Fox. Globally, Disney recently surpassed $5 billion for 2019, and $10 billion seems easily within reach for the full year.

What does it mean for investors?

In fiscal 2018, the period ending last September, Disney's studio-entertainment division posted a $3 billion profit on $10 billion of revenue, up 19% and 27%, respectively, year over year. Those gains reversed in the first half of fiscal 2019, with studio-entertainment segment revenue down 20% and operating profit down 50% year over year.

The strong performance of Disney's recent releases -- and The Lion King's blockbuster potential -- should drive a return to growth in the second half of fiscal 2019. Moreover, Disney's strong film slate for the last few months of 2019 (i.e. the first quarter of fiscal 2020) should get the studio off to an excellent start in the new fiscal year.

To be fair, the studio-entertainment division accounts for less than 20% of revenue and profit at Disney. However, the content produced there also powers its theme park and consumer products businesses. That's why Disney's continuing dominance at the box office is great news for shareholders.