Business
2024-04-09-3-how-disney-makes-money

The state of Disney following its proxy battle

The calm after the storm

Disney has had a busy few weeks, as shareholders shot down activist investor Nelson Peltz’s effort to take board seats — re-electing Bob Iger and the 11 other company-backed members by a “substantial margin”, thus ending the most expensive proxy battle of its kind in history.

Hedge fund Trian Capital pointed to Disney’s costly Fox acquisition, faltering movie output, unprofitable streaming business, and bungled succession plans as evidence that shareholders might be better served with a board switch-up. As well as “right-sizing” its legacy media business, the agitators wanted “Netflix-like” streaming profit margins and more tangible targets for the $60 billion that Disney is still planning to invest in its parks business over the coming decade.

That level of commitment to its parks was certainly not guaranteed in the depths of the pandemic, when travel restrictions shuttered Disneylands around the world. But the division has since bounced back to become the company’s most profitable. Indeed, despite only accounting for 39% of revenue in Q1 2024, the “experiences” segment was the company’s profit engine, delivering 80% of total operating profit.

DisneyStoryLiving+

Disney has long been in the business of entertaining people, but it’s also looking at satisfying more basic needs. One such intriguing iron in the fire is its Succession-lite Living+ alternative — a slated “Disney town” in California called Cotino, where permanent residents will be able to blissfully revel in all things Mickey and Marvel.

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Starbucks issues apology after viral “Bearista” cup meltdown

Holiday cheer turned into chaos this week for Starbucks after the coffee giant’s new “Bearista” holiday cup sent fans into a frenzy. 

Dropped alongside its 2025 holiday menu, the $30 beanie-wearing glass bear tumbler sparked long lines, sellouts, and even in-store scuffles before Starbucks stepped in with an apology.

“The excitement for our merchandise exceeded even our biggest expectations,” the company said in a statement to People. “Despite shipping more Bearista cups to our coffeehouses than almost any other item this holiday season, the Bearista cup and some other items sold out fast.”

Within hours of launch, frustrated fans flooded Starbucks’ social media pages and even store hotlines. Some customers waited in line before dawn and others said their stores received only a handful of cups. In one Houston location, the craze even turned physical, with police reportedly called to break up a brawl. Meanwhile, the cup is already reselling on sites like eBay, with listings topping $600.

“We understand many customers were excited about the Bearista cup and apologize for the disappointment this may have caused,” Starbucks said. While in-store customers may be upset, investors seem happy about the viral hit, as the stock has risen over 3% on Friday.

If you’re still hoping for a Bearista at market price, that may not be on order: the chain didn’t disclose how many cups were made or whether a restock is planned.

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Target tells workers to smile, wave, and greet shoppers if they come within 10 feet of them

Target just rolled out a new rule for store employees: smile, make eye contact, and greet or wave when a shopper comes within 10 feet — and if they get closer, within four feet, ask whether they need help or how their day is going, according to a new Bloomberg report.

Dubbed the 10-4 program internally, the rule mirrors rival Walmarts own 10-foot policy, formalizing behavior Target had previously only encouraged.

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Monster surges on energy drink buzz, while Celsius sinks on distribution concerns

Shares of Monster Beverage climbed 5% after the bell on Thursday, and held most of those gains into early trading on Friday, following strong Q3 results.

The energy drink giant topped market expectations, with quarterly sales up 17% year over year to $2.2 billion and adjusted net profits growing 41% to $524.5 million — 11% ahead of Wall Street’s estimates. In the report, Monster highlighted its zero-sugar line and new product launches, with a stack of novel flavors already released this year, as bright spots.

During a call with analysts, Chief Executive Hilton Schlosberg said that the global energy drink category “remains healthy with robust growth,” The Wall Street Journal reported, adding that demand for more affordable caffeinated drinks is rising as coffee has become “really expensive.”

Meanwhile, rival beverage business Celsius saw shares fall as much as 23% on its Q3 results yesterday — despite beating expectations, with revenue jumping 173% — largely due to concerns about a change in the company’s distribution channel, as its newly acquired Alani Nu brand joins the PepsiCo distribution network.

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