Disney Stock Struggles Despite Bob Iger’s Return as CEO

When Bob Iger reclaimed the CEO position at Walt Disney Co. (NYSE: DIS) in November 2022, investors hoped his return would mark the beginning of a dramatic corporate revival. Instead, the entertainment giant remains mired in a financial tailspin that has seen its stock performance dramatically underperform the broader market. Over the past five years, Disney’s stock has declined by 10%, while the S&P 500 (SPY) has delivered an impressive 100% return during the same period.

Iger’s second tenure at the helm has produced minimal improvement in the company’s fundamental performance. Recent financial results show revenue growing only 2% to $23.7 billion, with income from operations before taxes increasing just 4% to $3.2 billion. These tepid numbers underscore the challenge Iger faces in revitalizing a company that once dominated the entertainment landscape but now struggles to find growth across most of its business segments.

One of the most significant drags on Disney’s performance has been the company’s streaming service, Disney+, which launched in November 2019 during Iger’s first tenure as CEO. Critics argue the service was launched with insufficient content—approximately 500 movies from Disney, Pixar, Marvel, Star Wars, and National Geographic—making it unable to effectively compete with industry leaders Amazon and Netflix.

The financial consequences have been staggering. According to Forbes, Disney+’s operating losses, represented by the company’s Direct To Consumer (DTC) segment, have reached $10.7 billion since the service’s inception. While the streaming service has recently begun to generate modest profits, analysts question whether it can ever recoup these massive losses in present-day dollars, representing one of Iger’s most significant strategic missteps.

Amid the overall disappointing performance, Disney’s Experiences segment—which includes the company’s theme parks and resorts—has emerged as the only consistently strong performer. This division reported revenue growth of 8% to $9.1 billion and a 13% increase in operating income to $2.5 billion in the most recent period.

Without these strong results from the Experiences segment, Disney’s overall financial performance would have been significantly worse. The segment’s success highlights the ongoing challenge Iger faces: generating meaningful returns from most of Disney’s assets beyond its traditional parks business. The disparity between the parks’ performance and the struggles elsewhere in the company underscores the depth of the turnaround challenge.

Iger’s return was supposed to corral Disney’s talent and steady divisions that had faltered under his successor, Bob Chapek, who took over as CEO when Iger stepped down in 2020. However, Iger remained deeply involved with the company during Chapek’s tenure, serving as executive chairperson for much of that period.

This continued involvement has led some critics to argue that Iger never truly left Disney and therefore shares responsibility for the company’s long-term challenges. The continuity between leadership tenures suggests that Disney’s problems may be more deeply rooted than simply the performance of any single CEO, raising questions about whether even a respected leader like Iger can engineer the comprehensive turnaround investors are demanding.