Global entertainment and media company Disney (NYSE: DIS) fell short of the market’s revenue expectations in Q2 CY2026, but sales rose 6.8% year on year to $25.25 billion. Its non-GAAP profit of $2.06 per share was 11.1% above analysts’ consensus estimates.

Is now the time to buy Disney? Find out by accessing our full research report, it’s free.

Company Overview

Founded by brothers Walt and Roy, Disney (NYSE: DIS) is a multinational entertainment conglomerate, renowned for its theme parks, movies, television networks, and merchandise.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Disney’s sales grew at a weak 9.2% compounded annual growth rate over the last five years. This fell short of our benchmark for the consumer discretionary sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Disney’s recent performance shows its demand has slowed as its annualized revenue growth of 4.8% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

We can better understand the company’s revenue dynamics by analyzing its three most important segments: Entertainment, Sports, and Experiences, which are 44.9%, 17.8%, and 39.5% of revenue. Over the last two years, Disney’s revenues in all three segments increased. Its Entertainment revenue (movies, Disney+) averaged year-on-year growth of 6.2% while its Sports (ESPN, SEC Network) and Experiences (theme parks) revenues averaged 1.1% and 5.9%.

This quarter, Disney’s revenue grew by 6.8% year on year to $25.25 billion, missing Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 7.5% over the next 12 months. While this projection suggests its newer products and services will catalyze better top-line performance, it is still below the sector average.

ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention.

AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.

Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Disney’s operating margin has been trending up over the last 12 months and averaged 15.7% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports inadequate profitability for a consumer discretionary business.

In Q2, Disney generated an operating margin profit margin of 22%, up 6.3 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Disney’s EPS grew at 30.1% compounded annual growth rate over the last five years, higher than its 9.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

In Q2, Disney reported adjusted EPS of $2.06, up from $1.61 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Disney’s full-year EPS to grow 18.6% from $6.37 to $7.55.

Key Takeaways from Disney’s Q2 Results

It was good to see Disney beat analysts’ EPS expectations this quarter. On the other hand, its revenue slightly missed. Overall, this print had some key positives. The stock traded up 4.1% to $102.41 immediately after reporting.

Is Disney an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).