The stock market moved higher on Thursday, although major market benchmarks pulled back from larger gains earlier in the morning. By around 1 p.m. ET today, the Dow Jones Industrial Average (^DJI 0.40%) was up just a third of a percent after having risen more than 300 points shortly after the open. Investors celebrated continued slow inflation, but some persistent price pressures in the core CPI reading gave some market participants pause.
One big contributor to the Dow's gain was Disney (DIS -0.04%), which reported its quarterly financial results late Wednesday. However, Krispy Kreme (DNUT -0.84%) wasn't as fortunate and saw its stock lose considerable ground. Here's the latest on both companies and their prospects.
Disney aims to follow Netflix's lead
Shares of Disney were up about 4% early Thursday afternoon. The media and entertainment giant's fiscal third-quarter financial results for the period ended July 1 weren't all that impressive, but investors took some comfort from the company's plans to get its Disney+ streaming service looking healthier again.
Disney's numbers raised some concerns. Revenue of $22.33 billion was up just 4% year over year, with gains in the theme parks and experiences segment offsetting weakness in the media and entertainment segment.
The number of Disney+ subscribers continued to drop, with year-over-year declines of 5 million bringing the total to 146.1 million and marking the third straight quarter of falling subscription counts. But adjusted earnings were better than expected, despite losing a bit of ground compared to year-earlier levels.
Disney's conference call managed to generate more positive buzz about the company. Its announcement of price increases for ad-free Disney+ as well as for Hulu and ESPN+ subscriptions showed that the company was willing to flex its pricing muscle for its content.
Moreover, amid concern that higher prices might prompt more subscribers to share passwords, Disney said that it will take steps similar to Netflix (NFLX -0.63%) and fight back with new policies in the coming year.
Some investors remain concerned about the impact of striking workers on the entertainment industry more broadly. Short-term gains for Disney are nice, but the stock has a long way to go to recover all of its lost ground in recent years.
Krispy Kreme cools off
Elsewhere, shares of Krispy Kreme dropped almost 14%. The doughnut specialist reported second-quarter results that didn't give shareholders the same happy feeling that its customers get eating its products.
Financial numbers were mixed. Revenue was 9% higher from year-ago levels to $409 million, and organic sales jumped more than 11%. The business was particularly successful in the U.S. market, where retail, delivery, and e-commerce sales all climbed significantly. However, adjusted net income eased lower compared to year-ago levels, with adjusted earnings coming in at $0.07 per share.
CEO Mike Tattersfield continued to express his belief that the second half of 2023 would lead to continued growth, particularly with expectations to expand within European markets like France. That follows up on new markets in Latin America and the Caribbean in recent months.
Yet investors were disappointed that Krispy Kreme chose merely to reaffirm its past guidance for the full 2023 year, rather than upgrading it to reflect its performance from April to June. Unfortunately, shareholders haven't had a good experience since the doughnut maker's late 2021 initial public offering, as the stock has largely remained stagnant.
