By Ben Fritz

One of Disney's most profitable businesses is also the most vulnerable to President Trump's new tariff regime.

Disney's consumer products division is responsible for everything from Elsa dresses and lightsaber toys to Iron Man action figures. It generated 5% of the company's revenue last fiscal year but 13% of its operating income, because the profit margins on its licensing deals with manufacturers are so high.

Other entertainment companies also have consumer products businesses, but Disney's is by far the biggest. It says it is the largest consumer products licensor in the world.

Disney's shares dropped 9% Thursday and traded down another 6% Friday.

Most of Disney's consumer products revenue comes from licensing deals with companies that make and sell branded toys and clothing and games. A smaller amount comes from products it sells in its own stores and theme parks.

Disney says on its website that Disney-branded products are made in some 43,500 facilities in more than 100 countries.

While dolls and movie merch are directly vulnerable to tariffs, Disney's sizable theme parks business could take a hit as well, as an economic downturn would likely depress attendance. In addition, fiercer anti-American sentiment might make people less likely to travel to the U.S. or to attend Disney's theme parks in China, Japan and France.

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April 04, 2025 16:26 ET (20:26 GMT)

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