Summer is officially just a couple of days away, but Walt Disney (DIS +2.26%) is already showing off its beach bod, financially speaking. The media giant is already in a much better place than it was a year ago. Disney+ is finally turning profitable, compared to the $587 million operating loss that segment posted in the prior-year quarter. There was softness heading into last year's seasonally potent travel season at Disney World, as the massive Florida resort had just completed an 18-month celebration of the property turning 50. The year-over-year comparisons should be kinder this time around.
Then we get to what happened over the weekend, as Disney buried the narrative that its theatrical animation studio was dying if not dead. Inside Out 2 opened to a better-than-expected showing at the multiplex. It generated $155 million in domestic ticket sales, well ahead of the $90 million industry watchers were forecasting. Throw in another $140 million in box office receipts for international screenings, and the Pixar sequel has raked in $295 million in total ticket sales.
NYSE: DIS
Key Data Points
Putting the emotion in motion pictures
Inside Out 2's strong start is impressive. There's only one other animated feature with a stronger opening, Incredibles 2 with $183 million for its 2018 stateside debut. Putting things in a different perspective, Inside Out 2 almost topped Barbie's head-turning premiere weekend of $162 million last year.
The film should have legs -- or ice skates, if you will. An encouraging 92% of the more than 200 professional movie critics polled by Rotten Tomatoes are recommending Inside Out 2. Audiences have an even higher 96% approval rating. This is considerably better than Disney's last major animated release, with Wish winning over just 48% of film reviewers. Despite a higher 81% audience score, Wish failed to hit $20 million in domestic screenings for its debut weekend.
This isn't the only potentially bullish catalyst heating up the House of Mouse this scorching summer at an air-conditioned theater near you. Next month it will be Marvel's Deadpool & Wolverine hitting the silver screen, followed by Alien: Romulus a month later. With the market's strong positive reaction to Inside Out 2, it's worth pointing out that two other highly anticipated sequels to the popular Moana and The Lion King franchises will roll out before the end of this calendar year.
Image source: Disney.
Putting the magic in the Magic Kingdom
Disney World's Magic Kingdom continues to be the most visited theme park in the planet. The iconic gated attraction has been getting some new updates and additions lately, spearheaded by the opening of the new Tron Lightcycle Run in the springtime of last year at the end of the resort's celebration of its golden anniversary.
This year's new experiences are coming over the summer. Tiana's Bayou Adventure has been running previews for select guests this month ahead of an official June 28 grand opening. The classic Country Bear Jamboree attraction will reopen on July 17 with a brand-new show featuring countryfied versions of Disney songs. Both new experiences will have purists criticizing the replacement of the original experiences they grew up with, but shareholders should be applauding the moves.
Re-theming the Splash Mountain log flume experience with an updated storyline gives Disney the opportunity to cash in on an animation franchise that it can actually market. The original water ride was based on Song of the South, a problematic 1946 film that Disney hasn't made available to stateside viewers for decades. The refreshed attraction is based on The Princess and the Frog, one of its more recent animated releases introducing a new Disney princess. Earlier this month Disney announced that its studio was putting out a new Tiana TV series that will premiere on Disney+ later this year.
The Country Bear Jamboree update is facing less of a social media upheaval from nostalgic guests, likely because it's sticking with the same characters as before. The "special spice" here for investors is that the updated soundtrack features country music remakes of songs from animated films including Aladdin, Zootopia, and The Jungle Book. The new show will drum up interest in audiences revisiting the old films and streaming the new cover songs.
The end result of the new additions that will debut in the next 30 days is that they will initially draw more guests to the Magic Kingdom this summer. They will also boost merchandise sales and franchise visibility for the source material. The widely followed entertainment stock knows what it's doing, and the telltale summer season is just getting started.
