Disney has warned a fall in the number of tourists to the US will hit business after it was boosted by higher spending at its theme parks and cruises last year.
The entertainment giant said overall sales rose 5 per cent to $26billion (£19bn) over the three months to December 27, thanks to record revenues at its experiences division.
It said parks in the US – which include Walt Disney World in Orlando, Florida and Disneyland Resort near Los Angeles, California – and experiences posted a record quarterly revenue of $10billion (£7.3bn).
But it warned that these parks on home soil are being impacted by ‘international visitation headwinds’.
This means the division is seeing just ‘modest’ growth in this current quarter.
Foreign visitors have been swerving the US after Donald Trump whipped up tensions with other countries, including neighbours Mexico and Canada.
Tourist numbers to the US plunged last year as Donald Trump stirred tensions with other nations
There was a 6 per cent drop in foreign tourists to the US last year, according to industry body the World Travel & Tourism Council.
But Disney said it was anticipating higher growth in its experiences arm in the second half of the year ahead of its eighth cruise ship, the Disney Adventure, launching in March.
The update comes as Disney’s board are due to meet this week to crown a successor to current chief executive Bob Iger.
Frontrunners are thought to include Josh D’Amaro, the head of its theme parks business, and Dana Walden, co-chair of Disney entertainment, which includes its streaming business Disney+.
Ben Barringer, head of technology research at Quilter Cheviot, said the quarterly update was ‘good but not great’.
He explained: ‘The company did stress that there are some headwinds around international visitors to its US parks. Some of this will be due to macroeconomic pressures that continue to play out, but it will also be interesting to see if there is any political element too as that may intensify over the course of the next couple of years as a result.’
The group’s streaming business saw sales rose 11 per cent thanks to hits over the Christmas season, which included Avatar: Fire and Ash and Zootopia 2.
But Barringer said this arm simply continues to ‘hum along’ and may need ‘a fresher and improved content slate and product’.
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