Disney CEO Bob Iger recently made headlines during the company’s Q3 2025 earnings call when he announced that Lilo & Stitch has become the second-most lucrative merchandise brand under the Disney umbrella, trailing only Mickey and Friends. While this may seem like a charming underdog success story—especially considering Lilo & Stitch was never a box office juggernaut—it actually signals deeper issues for some of Disney’s biggest intellectual properties. The fact that Stitch merchandise is now outselling products from massive franchises like Marvel, Star Wars, and Disney Princesses should be a major red flag for investors and fans alike.
Experiment 626 in the Live Action Lilo & Stitch movie – YouTube, IGN
Historically, Marvel and Star Wars have been merchandising powerhouses, each generating billions in annual retail sales. The Disney Princess line, too, has long been one of the company’s most reliable revenue streams. If Stitch, a character from a modestly performing 2002 film that grossed just $273 million globally, has leapfrogged all three of these pillars in retail performance, it implies that those franchises have experienced a significant decline in consumer demand. It’s not necessarily that Stitch is now an unbeatable brand; rather, it’s that others are failing to maintain their past dominance.
In fact, reports indicate that Stitch-related merchandise generated an astonishing $2.6 billion in retail sales in 2024—an exponential rise from the $200 million it brought in just five years ago.
Nine months ago, when Disney scheduled “Lilo & Stitch” for release in theaters on Memorial Day weekend, Mr. Bergman was cautiously optimistic about its chances. Even with no new content, Disney’s consumer products group had managed to expand sales of Stitch merchandise to $2.6 billion in 2024 from $200 million in 2019. Young adults clearly had nostalgia for the property.
— Brook Barnes, New York Times
If we look at that $2.6 billion in 2024 and then add Disney’s own declaration of how much Lilo & Stitch had grown in retail sales year-to-year, things actually get pretty darn concerning.
“Meanwhile, Lilo & Stitch is on track to become the company’s second-largest licensed merchandise franchise this year behind only Mickey Mouse, with more than 70% revenue growth compared to last year. Stitch has also been deployed across our parks and experiences worldwide as we leverage the popularity of this global phenomenon.”
— Bob Iger, CEO The Walt Disney Company in Prepared Statement
If Stitch stuff is now selling 70% higher than 2024, that puts it at gross retail of $4.42 billion for the year. And don’t get me wrong, that’s great for Stitch. But it would not be great for Star Wars, Disney Princesses and Marvel. Yet according to Bob Iger, Lilo & Stitch is beating all of them!
Pedro Pascal at Star Wars Celebration – YouTube, Star Wars
This sharp growth contrasts with a broader narrative of stagnation or decline across Disney’s other core brands. The Marvel Cinematic Universe has suffered from franchise fatigue and a string of underwhelming releases. Star Wars has seen limited theatrical output and mixed reception to its Disney+ offerings. The Disney Princess brand, while still beloved, hasn’t launched a breakout new character in years, and existing characters may be facing cultural overexposure or shifting tastes among younger audiences.
Iger says Stitch has leapfrogged Star Wars. Yet even before rampant inflation, Star Wars was bringing in $3 billion per year in 2020. Today, one would expect inflation alone would have lifted that to more than $5 billion. So if a single character is outperforming the entire Star Wars portfolio now, it seems obvious that Star Wars and Marvel have cratered in retail sales.
Rey and Kylo fight on the Star Wars Galactic Starcruiser – YouTube, Theme Park Review
What’s especially troubling is what this signals for Disney’s broader strategy. If the company is now prioritizing a character like Stitch—once considered a niche figure—because he’s outperforming legacy franchises, that likely means executives are reallocating resources, marketing efforts, and product lines toward what’s currently working. That shift may come at the expense of developing or revitalizing other tentpole properties. The merchandising crown isn’t just symbolic—it drives revenue, fuels theme park integration, and supports multi-platform storytelling. When a character like Stitch ascends to the top of the mountain, it suggests the usual titans have stumbled.
In short, Bob Iger’s announcement isn’t just an amusing data point. It’s a clear signal that Disney’s once-dominant franchises—Marvel, Star Wars, and Disney Princesses—are losing ground where it matters most: consumer interest and spending. Stitch’s rise doesn’t just reflect his growing popularity; it reveals that the company’s flagship IPs are no longer the merchandise engines they once were.
Merchandising is a factor I stopped considering after most franchises stopped making money at theaters and streaming failed to turn a profit for most. If the audience tunes out of something, there’s no point in even trying to sell merch of it. Which is really bad for Hollywoke because that used to be more lucrative than the films and shows themselves.
This is just another example of how destructive customer apathy is and why I don’t believe Mouse House will survive in its current form much longer. By the time anyone inside does start making the necessary changes to regain what was lost, the company will have shed so many “assets” it will be a mere husk of what is now.
I absolutely loved the 3.75” lines for both Star Wars and Marvel back in the 2000-10’s. For some reason, they absolutely killed them. They were very articulated, and relatively affordable. I don’t know if the 6 inchers became the “favored” size because they still keep churning those out. I got my first figure (Darth) when I was 6 back in ‘78 and that’s the size I like. Like seemingly everything I loved up until the 2010’s, they too have been taken from me.
DEI merch does not sell. It’s that simple.
No one wants to buy Captain Black American, or Mary Sue Rey Palpatine. Or creepy Ped(r)o Pascal or that feminist Mary Sue blonde one out of F4.