Global entertainment and media company Disney (NYSE: DIS) reported Q1 CY2026 results topping the market’s revenue expectations, with sales up 6.5% year on year to $25.17 billion. Its non-GAAP profit of $1.57 per share was 5% above analysts’ consensus estimates.

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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

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Disney grew its sales at a 10.8% compounded annual growth rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Disney’s recent performance shows its demand has slowed as its annualized revenue growth of 4.4% 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 46.5%, 18.3%, and 37.7% of revenue. Over the last two years, Disney’s Entertainment (movies, Disney+) and Experiences (theme parks) revenues averaged 6.2% and 5.4% year-on-year growth while its Sports revenue (ESPN, SEC Network) was flat.

This quarter, Disney reported year-on-year revenue growth of 6.5%, and its $25.17 billion of revenue exceeded Wall Street’s estimates by 1.3%.

Looking ahead, sell-side analysts expect revenue to grow 7.4% over the next 12 months. While this projection indicates its newer products and services will spur better top-line performance, it is still below average for the sector.

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Operating Margin

Disney’s operating margin has more or less stayed the same over the last 12 months , and we generally like to see margin increases due to economies of scale and cost efficiency over time.

In Q1, Disney generated an operating margin profit margin of 18.3%, up 3.2 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 43% compounded annual growth rate over the last five years, higher than its 10.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

In Q1, Disney reported adjusted EPS of $1.57, up from $1.45 in the same quarter last year. This print beat analysts’ estimates by 5%. Over the next 12 months, Wall Street expects Disney’s full-year EPS of $5.92 to grow 20.4%.

Key Takeaways from Disney’s Q1 Results

It was encouraging to see Disney beat analysts’ EBITDA expectations this quarter. We were also happy its adjusted operating income outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 6.3% to $106.78 immediately following the results.

Indeed, Disney had a rock-solid quarterly earnings result, but is this stock a good investment here? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).