Disney’s week went from bad to worse on Thursday when the entertainment giant posted streaming subscription results that fell short of Wall Street’s expectations, causing the stock to sink more than 4 percent in after-hours trading.
The subscription miss comes as the Walt Disney Co. is still dealing with fallout from the revelation that it promoted critical race theory to its employees, encouraging them to strive for “equity,” or the “equality of outcome,” and to reflect on America’s “racist infrastructure.”
On Thursday, Disney reported subscriptions for its Disney+ streaming service had reached 103.6 million, which reportedly fell below the Wall Street consensus of 110 million subscribers. The subscription miss was surprising since the company had heavily promoted the new series WandaVision and The Falcon and the Winter Soldier.
The Chinese coronavirus pandemic continued to weigh on Disney’s parks division, resulting in $1.2 billion in lost operating income for the latest quarter.
Disney’s overall revenue was down 13 percent year-over-year, but leaders said sunnier days lay ahead.
“We’re pleased to see more encouraging signs of recovery across our businesses, and we remain focused on ramping up our operations while also fueling long-term growth for the company,” said CEO Bob Chapek in a statement.
Chapek said Disney parks are in a position to raise their capacity limits as more people get vaccinated.
Disney recently found itself in hot water when leaked documents obtained by Christopher Rufo and published in City Journal showed the company pushing critical race theory to its employees. The company has claimed that the report “deliberately distorted” the internal documents, saying the intent was to “allow diversity of thought and discussion.”
The blowback comes after a recent poll showed that nearly two-thirds of Americans believe companies like Disney have taken political correctness too far. The company has announced changes to its popular theme park rides Splash Mountain and Jungle Cruise after leftist activists complained that they are racist.
As Disney becomes more left-wing, company leaders remain silent on the studio’s recent collaboration with authorities in China’s Xinjiang region, where parts of the live-action Mulan were filmed. Regional authorities oversee concentration camps for Uyghur Muslim minorities. They also have reportedly overseen the systematic rape of minority women in the region.