Disney's 'Last Jedi' Box Office Fails Expectations

While Walt Disney Co.'s (DIS) latest global box office hit, "Star Wars: The Last Jedi," is still a sweeping success, marking 2017's most successful film and the No. 9 film of all time, a drop-off in sales could spell bad news for the entertainment giant. 

Last year, "The Last Jedi" raked in $1.3 billion in box office sales around the world, making headlines and warranting applause from the Street. However, due to various factors including a faster-than-expected falloff at the box office, weaker-than-expected toy sales and a poor debut in the massive Chinese market, the most recent Star Wars franchise film has fallen about $200 million short of analysts' expectations. (See also: Fox Deal Is ‘Home Run’ for Disney: GBH Insights.)

Significant Drop-Off in January

Disney bought the highly valued Star Wars franchise six years ago in a deal worth $4 billion. If the drop-off in consumer enthusiasm for the franchise continues, it could prove costly for the company as it heads off against a growing number of players surging on the trend for on-demand streaming and original content. 

"Disney started off with an incredible touch with Star Wars, but now it's looking a little less magic," said B. Riley FBR analyst Barton Crockett. 

The global entertainment giant is slated to release new movies in the saga from this May into the 2020s.

The Franchise Awakens?

Disney's 2015 "Star Wars: The Force Awakens," marked the franchise's return to the big screen and raked in a whopping $937 million in the U.S. and $2.07 billion globally. While few on the Street expected the latest film to bring in as much as it predecessor, an end gross of approximately $625 million in the U.S. and Canada fell short of a handful of forecasts. Despite "The Last Jedi"'s stellar opening in the U.S. and Canada, at $220 million compared to "The Force Awaken"'s $248 million opening, by mid-January the latest film was grossing less than half as much each day as its predecessor did during the same period in 2015.

While the numbers may indicate a negative headwind for one of Disney's most lucrative assets, it's important to note that not all of its series have followed in a similar pattern. Marvel Studios, which Disney also bought for $4 billion, has churned out 17 superhero films in the past decade with no signs of a slowdown. (See also: ‘Ragnarok’ Is Disney’s 17th Straight Marvel Hit.)

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