Disney World Still Isn’t Worried About Epic Universe Amid Attendance Decrease & Record Results
The Walt Disney Company reported its full fiscal year and fourth quarter results on Thursday with CEO Bob Iger and CFO Hugh Johnston highlighting the company’s successes in the quarter and 2025 as a whole. This covers the good & bad of these results as they relate to Walt Disney World & Disneyland, including comments about Epic Universe, park attendance, hotel occupancy & more.
Company-wide, Disney’s beat forecasts on earnings per share of $1.11 adjusted vs. $1.05 expected. However, the company missed on revenue, with $22.46 billion vs. $22.75 billion expected. Net income for the quarter was $1.44 billion, more than double the $564 million that Disney reported in the same period a year earlier.
Disney also said it plans to boost its dividend and double its share buyback plan for fiscal 2026. Following these mixed results, the Walt Disney Company’s stock was down 8% for its worst day in a long time. This is largely for one reason, and of course, that reason has nothing to do with theme parks. It’s once again the entertainment unit, which fell 6% from last year to $10.21 billion, dragged down by the linear TV networks and theatrical releases.
In the entertainment segment, streaming was once again a bright spot in the business as consumers continued to turn away from the pay TV bundle. The Disney+ streaming service added 3.8 million paid subscribers, bringing its total to 131.6 million, while Hulu had 64.1 million customers. In a move that follows industry leader Netflix, this marks the last quarter that Disney will report subscriber numbers.
The big issue for entertainment was that operating income for the linear networks dropped 21% to $391 million, even as it rose 39% to $352 million for streaming. Advertising revenue for the networks was down year over year, which was partly attributable to lower political spending.
There’s also the ongoing standoff between Google and Disney, as millions of YouTube TV subscribers lost access to Disney channels in late October after the two companies failed to reach a new distribution deal. During the earnings call, Disney’s CFO warned that the negotiations over YouTube “could go on for a little while.”
In a nutshell, that big 8% drop in the stock price is all due to Disney’s Entertainment segment and its 6% year over year drop, even despite strong streaming results. The concerns are a combination of linear deteriorating faster than anticipated and that being exacerbated by lower ad spending, plus the YouTube TV standoff and lost revenue from that.
Unsurprisingly, the theme parks are once again a bright spot–and the focus on this website–so let’s turn to that segment…
Disney’s Experiences segment (including Parks & Resorts) delivered record operating income for both Q4 and the full 2025 fiscal year. For the year, segment operating income hit $10.0 billion, an increase of $723 million compared to the prior year.
Disney’s Experiences division Q4 revenue rose 6% during the quarter to $8.77 billion and operating income increased 13% to $1.88 billion. For Q4, domestic theme park operating income rose 9% to $920 million.
International park income grew 25% to 375 million, a reversal from last quarter when the international parks were down slightly and carried by Walt Disney World and Disneyland.
The company attributed the increased operating results at its domestic parks & experiences to growth at Disney Cruise Line. This was attributable to an increase in passenger cruise days, partially offset by higher fleet expansion costs, both reflecting the launch of the Disney Treasure in the first quarter of the current year.
Disney CFO Hugh Johnston commented during the Q&A on DCL: “In terms of demand for Disney Cruise Line, it’s very strong, despite the fact that we have added as much capacity as we have. Our utilization rates are in line with what we have seen in the past.” The Disney Destiny will come online later this month followed by the Disney Adventure in March 2026, meaning Parks & Resorts should have another fiscal year buoyed by DCL.
The strong gains at the international parks were attributed primarily to growth at Disneyland Paris. The increase at international parks and experiences was attributable to: volume growth due to an increase in attendance, higher guest spending, and higher costs due to new guest offerings.
Drilling down a little deeper, Disney’s 10-K showed that attendance was down 1% year over year at the domestic theme parks, which should offer a ‘sneak peek’ at next year’s version of the annual theme park attendance report that was just released for 2024 a couple weeks ago (see Walt Disney World Attendance Rises Slightly as Universal Orlando Deepens Drop).
Pop math quiz time: setting aside DCL, how does Parks & Resorts hit record numbers despite decreased attendance at the domestic parks? Price increases, of course! Domestic parks reported an increase in per guest spending of 5%, which is fairly significant. Last year’s growth was a more modest 3% and that was on 1% attendance growth.
Disney doesn’t specifically say what drove higher per guest spending. Our best guess is higher ticket prices; prior to the last fiscal year, single and multi-day admission costs actually had not gone up since December 2022. They rose for the current calendar year and are up again for 2026. Lightning Lane prices are also up across the board, and then there’s the new Premier Pass, which launched prior to the start of the 2025 fiscal year. All potential drivers of that 5% increase.
Then there’s resort occupancy, which increased from 85% to 87% at Walt Disney World and Disneyland.
Since there are exponentially more Disney-owned hotels in Florida than California, this is largely a story of Walt Disney World’s strength. In addition to occupancy being higher, so too were available room nights. Without looking back at prior 10-Ks, I’m pretty sure these are the highest numbers we’ve seen on the resort side in a long time.
International occupancy was also up, increasing from 82% to 87%. That’s a huge boost, and explains why per room guest spending for the international parks was up an impressive 6%. (This was presumably driven by Disneyland Paris, since that’s the international site with the most hotel inventory.)
This momentum is continuing into the 2026 fiscal year and current quarter (October through December 2025). According to the CFO, “bookings are up 3% the first quarter. We feel good about that. They’re also up for the year. I feel good where are demand is right now.”
Notable to this is that Walt Disney World has already released its first round of discounts for travel dates through mid-2026, and there’s also the Kids Free Dining offer that’ll likely fuel further guest spending growth.
Johnston also boasted that per guest spending is up at the parks in the current quarter by 5%. Not coincidentally, price increases just hit at the start of the new fiscal year, with pretty much across-the-board increases by about 3-6%. Although discounting remains aggressive, it has not appreciably increased year-over-year (aside from a limited Georgia resident hotel deal and a Florida resident ticket deal–but those are likely offset by slightly more modest general public offers).
This is once again growth for Parks & Resorts coming in at the higher end of expectations. And it’s happening despite Universal Orlando opening Epic Universe. Not only that, but it’s being fueled in large part by higher hotel occupancy–numbers that are necessarily driven by Walt Disney World bookings since that’s where the hotels are (mostly).
Speaking of Epic Universe, the company was asked about the impact of Universal Orlando’s new theme park during the Q&A. Here’s what the CFO had to say: “We’ve talked about Epic Universe in the past as something that we knew was going to be a factor in domestic parks and, in fact, it was very much in line with our expectations. If anything, it seems to be impacting the rest of the competition down in Florida more than it’s impacting us. From a consumer perspective, we certainly feel good about it.”
He also added that demand or attendance was not “light” in the fourth quarter due to increased competition, but rather, in line with expectations. This is essentially a variation of what Bob Iger and Hugh Johnston have been saying on earnings calls for the last year-plus. If anything, they’ve gotten more bullish about the non-impact of competition on the parks.
My view is that this is probably a fair perspective, especially once taking hotel occupancy into account. (I’m starting to wonder when analysts might ask about DCL potentially cannibalizing attendance from Walt Disney World. I don’t think that’s a material concern at this point, but it’s at least a more interesting discussion than rehashing the same played out Disney vs. Universal debat.)
We don’t love to see attendance down, even if it is only by 1%. I’d be interested in knowing the breakdown between Walt Disney World and Disneyland on that.
Even though the latter is almost perpetually busy and we observed a decrease in wait times at Walt Disney World for all but the winter, I wouldn’t be surprised if Disneyland saw more of a drop. The 70th Anniversary didn’t seem to be a huge driver over the summer, and more limited ticket deals led to noticeably lower ‘feels like’ crowds and wait times in late summer and early in the Halloween season.
Regardless, the increase in occupancy is impressive. Even with flat attendance, shifting stays from off-site to on-site is huge. That’s doubly true when Universal Orlando just opened 3 new resorts, and countless other hotels have debuted recently in Central Florida. No matter how you slice it, Walt Disney World performing well. Stronger than expected.
It’s also worth acknowledging that this higher occupancy is likely directly attributable to better special offers. As we pointed out, Summer 2025 had the most aggressive discounts we’ve seen in a long time (and summer had become the lowest occupancy season of the year).
By carefully taking advantage of the discounts that were available over the summer on tickets & resorts, we saw the lowest prices for Walt Disney World vacations in over 6 years. (See How to Get the Cheapest Walt Disney World Trip Since 2019.)
Lower prices on resorts paired with higher occupancy resulted in higher per room guest spending, which strikes us as a rare win-win for guests and Disney. This is the exact opposite of what happened with the 1% decrease in attendance paired with higher guest spending to drive record revenue and income. Our view is that the Walt Disney World parks have excess bandwidth most of the year in terms of what’s comfortable crowd-wise, so we’d like to see an increase there with greater affordability. To each their own on that, though.
Ultimately, it was a strong full fiscal year 2025 for the company (minus linear networks), but especially the Disney Experiences division and the domestic Parks & Resorts, in particular. Walt Disney World and Disneyland, as well as Disney Cruise Line were real bright spots. Hopefully that reinforces the company’s bullishness in the business, and investing in Parks & Resorts over the next decade.
Walt Disney World has now reported record results in the last two quarters despite the opening of Epic Universe. That should not be overlooked, even though it probably will be. While Comcast’s recent earnings call expressed excitement and optimism for that new park’s opening, they’ve also hinted at some of the same issues (capacity and reliability) that we’ve been discussing for a while (see Why You Should Skip Epic Universe Until 2026).
Some fans so badly want to see Disney taken down a peg or go back to how things were in the ‘good ole days’ that they are willfully ignoring the weaknesses of Epic Universe, or at least the challenges presented by a new theme park. Not only that, but Universal Studios Florida, Islands of Adventure, and (especially) Universal Studios Hollywood were hit hard by attendance decreases last year.
As should be painfully obvious by now, Universal is not going to eat Disney’s lunch and Epic Universe isn’t hurting Walt Disney World. To be sure, Epic Universe is a great theme park that will be a formidable force over time. Epic Universe is still scaling up and the park’s demand and capacity normalizing over time will likely give Universal Orlando a hotel occupancy boost.
But nothing we’re seeing right now offers any support to claims that Epic Universe is negatively impacting Walt Disney World in any way, shape or form. Should be an interesting saga to watch continue, especially as Universal Orlando reduces friction for 2026 with the introduction of park hopping and multi-day visits to Epic Universe.
The “rising tides” thesis might very well be correct, at least for the two big players in Central Florida. The true casualties might be the downmarket offerings, which are feeling the squeeze in Orlando and beyond, especially as more price-sensitive consumers scale back on spending.
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YOUR THOUGHTS
Thoughts on the Walt Disney Company’s fourth quarter and full fiscal year 2025 earnings? Thoughts on the growth of the domestic parks? Would you like to see both attendance and affordability increase? Or do you prefer lower crowds/wait times and higher prices? Thoughts on occupancy growth at WDW and beyond? Do you agree or disagree with our assessment? Any other thoughts or commentary to add? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!
I think your rising tides comment is valid.
Attracting more people to visit theme parks in Orlando actually helps boost both parks. Whether it be split trips between both parks, or the family that says, “wow… a family trip to Epic Universe was great.. next year let’s do Disney.”
And yes — it will hurt the down market offerings more. As Epic Universe is a 1-day break from a WDW trip instead of Sea World.
And yes — I believe the booming cruise industry including DCL does hurt Orlando theme park attendance.
DCL is a fairly premium product, but a family could sail for a week in RCL or NCL cheaper than a week at WDW on land. And can see a lot of more affluent families with kids choosing a DCL cruise over the parks, especially in the sweltering heat of summer.
Epic was only open for half the fiscal year. The impact would be minimal as it ramps up operations, but it’s hard to know until it happens. Disney’s attendance is flat and there’s no plan to improve attendance. That’s the real risk for Disney. Disney will not increase park capacity since attractions count will be the same after they are done with their additions into the 2030s. Universal is adding more attractions now and seems like there will be quite a lot of activity well before Disney finishes.
I agree to an extent, but the immediate impact could’ve been a hit to hotel occupancy as planners prioritized Universal as their home base resort. That didn’t happen, though–the exact opposite did. That alone is a big deal, and shows Epic Universe is likely a net positive for WDW, at least in the near-term. IMO *that* was the real risk for WDW–losing overnight guests.
Every park at Walt Disney World has surplus capacity ~320 days of the year. They don’t need to increase park capacity in order to grow attendance; they could do both or either, at this point.
Interesting observation in your post about whether DCL might eventually start cannibalizing Walt Disney World attendance. I know if you ask my grands (ages 5 and 7) if they had to choose between a DCL and a WDW trip, they’d choose DCL. They got to do both this year but only because the grandparents (me) paid for the WDW hotel room and the parents paid half price for kid tickets due to the Cool Kids summer promotion.
I don’t really think this is a serious danger at scale, but I have heard about it happening among fans more and more.
Regardless, if some fans are going to exaggerate about Epic Universe eating Disney’s lunch, figured I might as well exaggerate about the more likely scenario that Disney eats its own lunch. 😉
For what it’s worth, I do think Universal will continue to take marketshare from Disney and could be in a strong position in 10-15 more years. But they’ll have to keep their foot on the gas with billions and billions more dollars of investments at all 3 parks.
My theory re: the Disneyland 70th is twofold: the first is that the resort has leaned A LOT into changing entertainment as meaningful ways to drive growth; perhaps too much so. It might work like a charm if all of the entertainment is new and/or a meaningful improvement, but as we’ve seen over the last several years, that has not always been the case. And what they update seems to be entirely random and not necessarily correlate to the age of the production or fatigue of the audience.
Secondly, apart from WOC, there wasn’t anything actually new offered, just old standbys that, frankly, had runs less limited by lack of demand than by Disney’s own cheapness . Although I think the 70th was well-executed in general, especially on some of the smaller, easier to overlook items, it’s hard to get excited about Disney doing what they should have been doing anyway. They shouldn’t have sat on Paint the Night for five plus years, and they should have continued running Wondrous Journeys instead of cheapening out with MMM, Together Forever, and other shows (speaking of: Fix Fantasmic! Want to update a Fireworks show? Why not do the aged Halloween or Christmas shows instead of the summer shows?). “We’re finally doing what we should have been doing the whole time anyway” isn’t really a good concept for a marketing campaign, especially in light of other cuts.
I wonder if we’re at a point where Disneyland will struggle to make real gains without 1) new attractions, or 2) making it seem like the park is making every effort to deliver a premium experience in line with the premium price. I wonder if people are noticing the cuts and not as willing to return unless they can be assured that Disneyland is running somewhere closer to how it once did.
Or maybe Disneyland just needs to get to the bottom of why people aren’t attending in summer in the huge numbers they once did. AP blockouts are probably part of the story, but surely can’t be all of it. Summer SoCal weather isn’t particularly extreme as Florida’s has been and the park has had (and hopefully will continue to have?) long hours that give people the opportunity to avoid the peak heat of the day. To be fair, this isn’t just a problem Disney is facing, it seems to be industry wide, but it’s 100% a problem the resort will need to solve going forward. There’s a point at which they can’t just lean more into Halloween and Christmas to make up those gains. I definitely see them trying with things like Food and Wine, Season of the Force, etc., but are they actually making a meaningful dent in park attendance beyond the locals that would go anyway? It’s hard to tell.
I think all of your theories are contributing factors, but really, the biggest thing (IMO) is that there was an incredibly aggressive ticket deal that ended the day before the 70th started, and a mediocre deal starting the day after–and that ended a full month earlier than normal.
Again, I don’t disagree with anything you’ve written–it’s all accurate–but IMO, the explanation largely boils down to cost-conscious consumers and the great deal pulling forward demand and outweighing the entertainment of the 70th.
It’ll be interesting to see how well the upcoming 2026 ticket deal performs. My guess is that it’ll do quite well.
Thanks for the summary, so I don’t have to read the original :-). I have one question: why would bad news from the entertainment unit by itself cause an 8% drop in the overall stock price?
I’ve seen so many “Disney has lost the magic” posts on Facebook and praising Epic Universe as the vehicle for Disney’s comeuppance, conveniently overlooking the real issues with Epic right now. Who knows what 2026 will bring, but I suspect the overall economy will play a larger part in Disney’s fortunes than the new theme park.
“I have one question: why would bad news from the entertainment unit by itself cause an 8% drop in the overall stock price?”
My best guess is that investors are fearing that the decline of linear is accelerating or occurring faster than expected, and that streaming growth is unsustainable? That would be my personal take.
Still, I think it’s odd how even investors seemingly ignore the strong performance of Parks & Resorts. DCL alone is doing amazingly well, even as it adds new ships to the fleet. Disney is still viewed as an entertainment company for some reason, when really it’s a Parks & Resorts business that dabbles in entertainment.
Entertainment is bigger than Experiences, at least in terms of revenue. Looking at percentages in this case obscures the increases and decreases in dollar values for the quarter, which combined with a baseline comparison is Wall Street’s focus. Once Experiences *is* bigger than Entertainment is when we should see the Street focus more on parks and the like.
(As an aside, Comcast still does not appear to mentioning per guest spending in its quarterly reports. I’m sure that means *something* but I’m not sure what.)