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The Walt Disney Company posted first-quarter earnings Wednesday that beat on the top and bottom lines but also revealed the start of predicted streaming subscriber losses at its Disney+ service. The service lost 700,000 subscribers over the final three months of 2024, which is the first quarter of Disney’s fiscal year 2025. The media and entertainment giant had warned during its fiscal fourth-quarter report in November that it expected a modest decline in core subscribers during the first quarter of 2025. Hulu picks up the streaming slack Total paid Disney+ subscriptions currently rest at 124.6 million compared with 125.3 million at the end of the fiscal fourth quarter. ESPN+ also saw a loss of 700,000 subscribers, currently at 24.9 million, compared with 25.6 million at the end of last quarter. Though Disney saw losses at Disney+ and ESPN+, total Hulu subscriptions rose to 53.6 million, compared with 52 million at the end of the fiscal fourth quarter. The decrease in subscribers came as a result of an increase in prices that Disney announced in August of 2024. The price rose to $9.99 with ads and $15.99 with no ads, following its announcement of continuous playlists and growing offerings. Disneys earnings beat underscores the success of its cost-cutting initiatives and resilient performance in parks and studios, offsetting headwinds in streaming,” Jesse Cohen, a senior analyst at Investing.com, said in an emailed statement. However, the surprising loss of Disney+ subscribersthe first decline since its 2019 launchraises red flags about saturation in a crowded market and the trade-offs of its pricing strategy.” Disney’s stock was down around 1.5% Wednesday in afternoon trading. Theme parks hampered by extreme weather Disney’s domestic parks and experiences business saw a decline of 5% in operating income due to hurricanes and cruise preopening expenses. However, it did see operating income increase 28% for international parks. Although Disney lost subscribers for Disney+ and saw a decline in domestic park attendance, net income increased nearly 23% to $2.64 billion, compared to $2.15 billion during the same quarter last year. Revenue increased 4.8% to $24.69 billion compared to $23.55 billion from last year. Our results this quarter demonstrate Disneys creative and financial strength as we advanced the strategic initiatives set in motion over the past two years, said CEO Robert Iger in a statement. The company’s success was thanks in part to box office performance from its studios, which had the three top movies in 2024: Inside Out 2, Deadpool & Wolverine, and Moana 2. Moana 2, released during Q1, grossed more than $1 billion, which was a driving factor behind the improvement in operating results. In its sports-content segment, Disney saw a 13% operating-income growth. The increase came as a result of college sports and one additional NFL game, as well as Disney’s exit from the Venu Sports, the planned sports-focused streaming service that Disney and other media giants discontinued earlier this year. The company plans to launch its own direct-to-customer streaming app for ESPN this fall, company executives said on a conference call Wednesday. Disney’s streaming business may continue to face headwinds in a crowded marketplace, particularly among price-conscious viewers. “While profitability in streaming improved, the subscriber dip suggests price hikes or content gaps may be driving churn, particularly as rivals like Netflix and Amazon Prime retain momentum, Cohen said. Disney told investors on Wednesday that it expects another decline in subscribers during the second quarter.
Category:
E-Commerce
Major changes are afoot behind-the-scenes at Walmart. The retailer is cutting hundreds of jobs and shuttering its North Carolina office. Employees from certain locations are also being asked to move to its newly opened headquarters in Bentonville, Arkansas, and other central hubs. News of the shake up was first reported by Fox Business after Walmart Chief People Officer Donna Morris sent a memo detailing the cuts and other changes to employees. “We are making these changes to put key capabilities together, encouraging speed and shared understanding,” the memo, viewed by Fox read. “Through this review process, we have eliminated some roles as we streamline how we work.” According to the memo, Walmart is also opening offices in Sunnyvale, California, Bellevue, Washington, and expanding offices in Hoboken, New Jersey and New York City.The cuts aren’t the first to hit Walmart, which is both the world’s largest employer and the world’s largest retailer. In May, the company cut hundreds of jobs and asked Dallas, Atlanta, and Toronto workers to relocate to central hubs, too. At the time, it also asked that all remote employees come back to the office full time. That move came shortly after the company said it would shut down its virtual health care service, and close its 51 in-store health centers. Some experts believe that Walmart’s efforts to streamline operations, including continued cuts and relocating employees to headquarters, are about staying competitive with the world’s largest online retailer: Amazon. “I think this is the year where Walmart’s assault on Amazon gains serious momentum,” Fox Business market analyst Keith Fitz-Gerald said per Newsweek in January. “I think the stock is going to radically outperform it, and we’re going to see a renewed customer confidence in that particular brand.” Walmart is not alone in its 2025 layoffs. Salesforce, a cloud-based software company, announced this week that it would cut 1,000 roles at the company. Amazon, Meta, Microsoft, have each had their own rounds of major layoffs already this year, too. And when it comes to retailers, 2025 is likely to be another big year for store closures. According to a January report from Coresight Research, as many as 15,000 U.S. retail locations could shutter this year. Party City, Big Lots, and Macy’s are among the brands that have already announced closures this year. News of the latest cuts comes shortly after the Walmart faced blowback for rolling back its diversity, equity and inclusion (DEI) program just months ago. After the brand announced it would end the initiative, 30 investors sent a letter to CEO Doug McMillian, voicing their collective disdain for the move. Walmart has sent a clear signal to all underrepresented and marginalized groups that Walmart will not fight to protect their rights,” the letter stated. Walmart didn’t provide details on how many employees would lose their jobs, or how many it’s asking to relocate. But it did specify that employees would have a month to let Walmart know if they will move in order to keep their job with the company.
Category:
E-Commerce
Before a wildfire ravaged their street in northwest Altadena, Louise Hamlin and Chris Wilson lived next door to each other in nearly identical houses. I chose an old home in an old neighborhood because it has soul, said Hamlin, a 51-year-old single mom with a teenage boy, who bought her 1,500-square-foot home 10 years ago. Today, gone are their charming English-style cottages built in 1925 with the welcoming porches and Palladian windows. Amid the rubble and ash, little is left of their historic neighborhood. In the weeks since the Eaton wildfire took their homes, Hamlin and Wilson have been stumbling through the layers of business, bureaucracy, and emotional trauma of surviving a natural disaster, with their sights firmly set on rebuilding. How theyll navigate rebuilding is a story of contrasting fortunes and unequal recovery that reveals the nations growing home insurance crisis. Her insurance has already paid out nearly a million dollars and she is searching for contractors. He is contemplating loans, lawsuits, and moving his family out of California. It changes the whole trajectory to your life, said Wilson, 44, who bought his house five years ago with his wife, who is six months pregnant with their first child. The Unfair Plan Hamlins home was privately covered by Mercury Insurance, but Wilson was forced onto the California Fair Access to Insurance Requirements Planthe states bare-bones insurance programwhen SafeCo declined to renew his policy last May. The FAIR Plan insures people who cant get private coverage but need insurance as a condition of their mortgage. As wildfires, hurricanes, and other natural disasters become more frequent due to climate change, many property owners find themselves struggling to find or afford private insurance. The issue is particularly acute in California, where some major insurance companies have stopped writing new policies altogether or are refusing to renew existing ones. State officials recently started rolling out new regulations to entice insurers to stay in California, with the hope of getting as many homeowners as possible off the FAIR Plan. FAIR, with its high premiums and basic coverage, was designed as a temporary safety net until policyholders find a more permanent option. Yet the number of FAIR Plan residential policies more than doubled from 2020 to 2024, reaching nearly 452,000 policies last year. For Wilson and Hamlin, their parallel rebuilding journeys serve as a cautionary tale. Wilson paid nearly 60% more in premiums related to the fire than Hamlin, for less than half the coverage. Thats why a lot of people call it ‘The Unfair Plan.” said Amy Bach, executive director of the consumer advocacy group United Policyholders. SafeCo’s parent company Liberty Mutual said in a statement that it couldn’t comment on any individual policies but acknowledged difficult but purposeful business decisions in California. Mercury didnt respond to requests for comment. Janet Ruiz, spokesperson for the Insurance Information Institute, which represents many major insurance companies, said California is fortunate to have the FAIR Plan, which is required to accept everyone. Ruiz said outcomes would be even worse if homeowners had no coverage at all. Insurance Commissioner Ricardo Lara said California is working to make sure all claims are paid. He said in a statement that his office is working to get homeowners off the FAIR Plan and back to traditional more comprehensive insurance coverage. A FAIR Plan spokesperson declined to comment on Wilsons case, and noted that its difficult to compare policies and coverage. 31,000 wildfire claims Thousands of people lost their homes in the Eaton and nearby Palisades Fires, which were among the most destructive in California history. The FAIR Plan said it expanded staffing to meet the surging demand and has a funding mechanism in place to pay all covered claims. State data shows more than 31,000 wildfire-related claims had been filed as of last week, including roughly 4,400 claims under the FAIR Plan. Hamlin had standard comprehensive home insurance, with an annual policy premium of $1,264 at the time of the fire. She can receive up to $1.5 million to replace her home, other structures, and personal property, including up to $303,000 for living expenses while displaced. Her policy further entitles her to coverage that could add more than $200,000 to help her rebuild. Wilson, meanwhile, pays a $2,000 premium for the FAIR Plan that sets his maximum payout at $686,000, including $100,000 for living expenses while displaced. Wilson also had to buy wrap-around insurance for $1,500 a year for issues the FAIR Plan doesnt cover, such as burst pipes or falling objects. That supplemental plan doesnt cover fire damage. Hamlin said Mercury’s support has been exceptional, immediately sending her money and helping with next steps such as finding housing and getting contractor quotes. Within days, the company wired her tens of thousands of dollars to get started while the process fell into place. Being able to rest at night and wake up and deal with everything else is really important, Hamlin said. Meanwhile, Wilson has struggled to even talk to a FAIR Plan representative. There was zero communication in the first two weeks, contact information was listed incorrectly, phone numbers had no voicemail, and emails bounced back. Half the time, I feel like Im doing something wrong, Wilson said. After the Associated Press reached out for comment, Insurance Department spokesperson Michael Soller said a representative would contact Wilson directly. Its just luck, really’ Wilson said he feels haunted by his choices. He thought he had bought property in a low-risk area, and had avoided looking for homes in another neighborhood further north after hearing that people there had been dropped by their insurers. Hamlin, too, was aware of the fire risks when she moved in. She previously lived in Pasadena and was surprised that State Farm, her then-insurance company, would not offer her coverage in Altadena. She chose Mercury because it was the cheapest option, and was considering pursuing even more robust coverage. I could have been dropped when Chris was dropped. Any of us could be at any time. Its just luck, really. Its nothing I did or didnt do, Hamlin said, stunned by the comparison. I had the same risk factors as everyone else. Stephen Collier, a professor of urban planning at University of California, Berkeley, said the seemingly random nature of who gets dropped and when has much to do with insurance companies’ complicated risk models. Theyre all trying to manage their exposure, Collier said. If you think about wildfires, you dont want concentrated exposure. Wilson said SafeCo requested an inspection of his property before deciding not to renew his policy. Panicked, he tried unsuccessfully to negotiate with them, offering to clear brushes, trim trees near the roof, and other wildfire mitigation efforts. Wilson shopped around aggressively with his insurance agent but to no avail, and resigned himself to the FAIR Plan, assuming he would eventually find private insurance again. There was another catch: Wilson said he couldnt get comprehensive replacement cost coverage on the FAIR Plan because his roof was too old. Instead, he ended up with what is known as actual cash value coverage, which greatly limits the payout based on the physical depreciation of what was lost. Were talking hundreds of thousands of dollars and thats very, very painful, said Bach of United Policyholders. An uninsurable future Citing rising fire risks and other problems, seven of the top 12 insurance companies either paused or restricted new business in California in 2023. State regulations give insurers more latitude to raise premiums in exchange for issuing policies in high-risk areas, including consideration of climate change in premiums and passing the costs of reinsurance to consumers. But those are only short-term solutions, said Dave Jones, California’s insurance commissioner from 2011 to 2018. He pointed to Florida, where officials have done everything the insurers asked California to do but yielded little success. Were marching steadily towards an uninsurable future in the United States because were not doing enough fast enough to address the underlying cause, which is climate change, Jones said. Unless governments take on the financial burden of serious mitigation efforts, the price of Californias fire risk will remain unequal and left to the homeowners, Collier of UC Berkeley said. That could be the underinsuredlike Wilsonswallowing their personal losses, or all California homeowners collectively saddled with increased premiums, or both. State Farm, Californias largest insurance company, this week urged the state to approve an emergency rate hike of 22% for homeowner policies starting in May after processing nearly 8,700 claims and paying out more than $1 billion to policyholders for the LA fires. Theres a huge amount of risk in the system and theres a big question of who is going to pay for this, Collier said. Wilson expects hell have to take out loans to rebuild. Hes considering joining a lawsuit against Southern California Edison that alleges the utilitys equipment sparked the blaze, in hopes of receiving settlement money. But with a baby on the way, Wilson said he cant fathom living in limbo on the FAIR Plan forever, and hes thinking about leaving California if private insurance remains out of reach. I dont want to have to be prepared to maybe lose everything again, Wilson said. Stuck paying for an insurance that doesnt cover anything. You dont want to live in a risky area. You dont have the safety net. Sally Ho and Trān Nguyn, Associated Press Associated Press data journalist Aaron Kessler contributed to this report.
Category:
E-Commerce
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