Disney's theme parks are struggling, and it's another warning sign for the economy

The entertainment giant reported weaker-than-expected results in its theme parks division, highlighting a broader consumer spending pullback.

• Disney reported weaker-than-expected results for its theme parks division in its latest earnings.
• It blamed the drop on weakening consumer demand, which it said was likely to continue.
• Americans are reigning in spending after being hammered by inflation, forcing companies to adapt.

Disney's theme parks are struggling another warning signal for the US economy.

The entertainment giant reported weaker-than-expected results in its theme parks division as it announced third-quarter earnings on Wednesday, in another sign that consumers are reining in spending as economic storm clouds gather.

Disney's operating profit for its domestic parks and experiences declined 3% from the previous year to $2.2 billion, while revenues grew 2% to $8.4 billion.

The company blamed the decrease in operating income at its domestic theme parks on high costs linked to inflation and a larger drop in consumer demand than expected.

Disney warned that the "demand moderation" for its parks and experiences would likely continue, and could impact the next few quarters.

Disney's theme parks have been a key driver of revenues in recent years, with the company committing an extra $60 billion to expand them further last year.

As high inflation has hammered American's wallets, some consumers have cut back spending on trips and thrill rides. Comcast also saw revenues from its Universal Studios theme parks fall in its Q2 earnings in July.

Cuts in consumer spending have been felt across the US economy.

Fast food chains such as McDonald's, Burger King, and Taco Bell have all launched discounts and value meals to try and lure in cost-conscious consumers as some reported slowing sales.

Starbucks also reported a decline in visits due to a "challenging consumer environment."

It's not all bad news for Disney, however,

The entertainment behemoth's earnings were buoyed by strong results in its combined streaming division, which turned a profit for the first time, and big hits at the box office, including the Pixar film Inside Out 2.

Disney did not respond to a request for comment from Business Insider, made outside normal working hours.