At Least Plush is Selling

Walt Disney Co. (Burbank, Calif.) reported that weaknesses in many of its multi-media divisions had caused operating income in the company's fiscal second quarter to fall 32 percent. But the company said Disney stores'comp sales rose 25 percent.

The entertainment giant's TV holdings (ABC, ESPN, A&E, the Disney Channel, E! Entertainment and others) were hurt by a soft advertising environment. And falling revenues in its film unit were blamed on heavy marketing costs for the 12 films that had been released during the quarter.

But while theme park and resort business was still down (revenue fell 8 percent, profits 15 percent), the company expressed optimism that the fall-off in tourism following Sept. 11, 2001, was beginning to reverse itself. It did acknowledge, though, that Easter fell within the quarter this year and that foreign visitors were not yet returning to the U.S. parks in large numbers.

Though revenue fell in the consumer products unit by 1 percent, that was stronger than most analysts had been expecting. Disney does not usually break out the unit's sales between licensing and its own stores'performances, but cfo Thomas Skaggs did report the unit's encouraging same-store sales performance.