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Disney Consumer Products Segment: A Closer Look

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Jul. 31 2015, Updated 8:05 a.m. ET

Disney Consumer Products

In the previous part of this series, we looked at The Walt Disney Company’s (DIS) merger of two segments: Disney Consumer Products and Disney Interactive. Now we’ll take a closer look at Disney Consumer Products.

As you can see in the above graph, ~61% of Disney Consumer Products’ 1H15 revenue came from licensing and publishing. The remaining 39% came from retail and other sources. The total revenue for Disney Consumer Products was ~$2.4 billion in 1H15.

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Licensing and publishing

Disney licenses its popular characters to third parties for use in consumer merchandise. The Disney Consumer Products segment had licensing and publishing revenues of $1.4 billion in 1H15, an 18% increase over 1H14. This was due to an increase in merchandise licensing to third parties driven by the success of the movies Frozen and The Avengers.

Licensing is driven by Disney’s IP (intellectual property) such as evergreen characters Mickey and Minnie. Disney has 11 franchises that did $1 billion in retail sales last year.

Disney’s publishing business includes Marvel Worldwide, which publishes comic books, learning products in print and digital format, children’s books, and magazines. It competes with other comic book publishers such as DC Comics (TWX), which owns the IP of Batman and Superman.

Retail

Disney Consumer Products’ retail business had revenues of $922 million in 1H15. The segment markets Disney, Marvel, and Lucasfilm–themed products under the Disney Store name and through online websites like DisneyStore.com and MarvelStore.com. Disney’s merchandise also retails through online retailers like Amazon (AMZN).

At the end of fiscal 2014, Disney had 210 stores in North America, 73 stores in Europe (EFA), and 45 stores in Japan (EWJ).

You can get a diversified exposure to Disney by investing in the SPDR S&P 500 ETF (SPY), which holds ~1% of the stock.

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