Key Points
Disney's theme parks and cruises represented 54% of the company’s total operating income in the latest fiscal quarter.
The leadership team is in the middle of a 10-year, $60 billion capital investment plan to bolster the experiences segment.
Walt Disney (NYSE: DIS) has historically been known as a leader in cable TV, thanks to popular networks like ABC and ESPN. In recent years, the company's streaming operations have gotten a lot of attention, thanks to the success of Disney+ and Hulu, as well as the launch of the stand-alone ESPN platform.
These are important to Walt Disney, to be sure. However, investors should understand that these parts of the business pale in comparison to the entertainment stock's most lucrative segment.
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During third-quarter 2026 (ended June 27), Disney's experiences segment posted 10% year-over-year revenue growth. This was a better gain than any other segment. Its sales figure of $10 billion accounted for 40% of the entire company's total.
Operating income for experiences soared 20%. This profit metric represented 54% of the company's total operating income.
The experiences segment includes the theme parks and cruises. These make up what is arguably the most competitively advantaged segment of the business. They have high barriers to entry, and because Disney owns an immense portfolio of intellectual property, these experiences are differentiated in the industry. Consequently, they have historically had pricing power.
Despite the scale of this division, there is still a sizable growth runway to capture. In September 2023, the management team announced a 10-year, $60 billion capital investment plan to bolster the experiences segment in an effort to reach more people around the world. This can support the overall company's long-term financial performance.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool has a disclosure policy.