Disney Characters Drive $8 billion Disney Consumer Merchandise Business

+1.40%
Upside
122
Market
124
Trefis
DIS: Walt Disney logo
DIS
Walt Disney

Disney (NYSE:DIS) earns a significant amount of money from its consumer merchandise division where it sells books, video games, toys, apparel and other products based on Disney’s well known characters and themes.   We estimate that Disney’s consumer products business is worth about $8 billion and contributes about 10% of the $36.73 of Trefis price estimate for Disney’s stock.

Relevant Articles
  1. Disney Stock Has 2x Upside If It Rises To Pre-Inflation Shock Highs Of $202 Per Share
  2. Disney Stock Could Rise Over 2x If It Recovers To Pre-Inflation Shock Highs
  3. Will Slowing Streaming Growth Impact Disney’s Q3 Results?
  4. Disney Stock Could More Than Double If It Recovers To Pre-Inflation Shock Highs
  5. A Deep Dive Into Disney’s Streaming Operations After A Tough Q2
  6. What To Expect As Disney Reports Q2 Results?

The significance of the consumer products division reflects how successful Disney is in leveraging the popularity of its cartoons, films and TV shows.

Disney’s Consumer Business Makes Money through Licensing, Sales & Publishing

We estimate that Disney will earn consumer product revenues of about $3 billion in 2010 and that this will increase to nearly $4 billion over the Trefis forecast period.

Disney makes money from Disney-branded merchandise primarily in two ways:

1. Direct Sales & Publishing

Disney sells products through its own Disney Stores and through its internet sites, DisneyStore.com and DisneyOutlet.com. In addition, the company also publishes books and magazines in several languages based on the movie characters.

2.  Licensing

Disney is one of the top merchandise licensors in the world.  The company licenses its characters to other merchandise manufacturers and earns a royalty based on the sale price of the end product.

Disney licenses its characters for merchandise such as toys, apparel, accessories, footwear, home furnishings, home décor, health, beauty, food, stationery and consumer electronics.

Some of the characters or properties licensed include Mickey Mouse, Winnie the Pooh, Disney Princess, Cars, Hannah Montana, and High School Musical.

You can modify our forecast above to see how Disney’s stock price could be impacted if the forthcoming release of its 3D animated movie, Toy Story 3, boosts the company’s consumer product revenues.

For additional analysis and forecasts, here is our complete model for Disney’s stock