Hugh Johnston
Senior Executive Vice President & Chief Financial Officer at Walt Disney
Thanks, Bob.
Diluted earnings per share, excluding certain items, for the second fiscal quarter were $1.21 and reflected the second quarter in a row of strong double-digit percentage year-over-year earnings growth. We also met or exceeded all of our financial guidance for the quarter. And as Bob mentioned, we are now targeting adjusted EPS growth of 25% for the full year. At our Entertainment segment, second quarter operating income increased by over 70% versus prior year, driven by direct-to-consumer. Entertainment DTC revenue increased 2% sequentially and 13% year-over-year, and generated operating income of $47 million. These results exceeded our guidance, primarily due to expense savings. Core Disney+ subscribers increased by 6.3 million in the quarter, reflecting nearly 8 million additions domestically, driven by charter entitlement and a slight loss internationally from the impacts of wholesale deal changes and price increases.
Disney+ core ARPU increased sequentially by 6% or $0.44, reflecting price increases for the domestic premium tier as well as international ARPU growth, partially offset by lower ad-supported ARPU domestically, driven by dilution from charter entitlements. And the recent Charter deal also drove Disney+ ad tier subscriber growth in the quarter. We ended Q2 with $22.5 million ad tier subscribers globally. We are pleased with the progress we're making in streaming although, as we said before, the path to long-term profitability is not a linear one. On that note, we are forecasting a loss for Entertainment DTC in the third quarter, the vast majority of which is due to Disney+ Hotstar's ICC cricket rights. We also do not expect to see core subscriber growth at Disney+ in the third quarter, but anticipate sub-growth will return in Q4.
As Bob mentioned, we continue to expect our combined streaming businesses to be profitable in the fourth quarter and expect further improvements in profitability in fiscal 2025. At Entertainment Linear Networks, a decrease in operating income versus the prior year was primarily driven by lower affiliate and advertising revenue domestically and lower affiliate revenue internationally. And at Content Sales/Licensing and Other, lower Q2 results versus the prior year reflect the absence of significant theatrical releases in the quarter. For Q3, we expect this business to generate modestly positive operating income, an improvement over the prior quarter and prior year.
Moving to Sports, second quarter operating income decreased slightly versus the prior year, driven primarily by a decrease at ESPN, offset by improved results at STAR India Sports. As expected, at ESPN, lower results at the domestic business reflect higher programming and production costs from the timing of an additional college football playoff game in the quarter versus the prior year, which were only partially offset by higher ad revenue. Domestic affiliate revenue also decreased in the quarter. ESPN domestic ad sales increased by more than 20% versus the prior year or high single digits when adjusted for the college football playoff timing shift of an additional game as well as a new NFL divisional playoff game in Q2 of this year. Q3 to date, we are seeing healthy demand driven by the NBA playoffs and domestic ESPN cash ad sales are pacing up.
At Star, higher results in Q2 versus the prior year include the impact of a decrease in programming and production costs, attributable to the non-renewal of BCCI cricket rights. Looking ahead, note that we are currently expecting to incur linear ICC rights expense at Star India in Q3. At Experiences, second quarter revenue grew 10%, operating income grew 12% and segment margins expanded by 60 basis points versus the prior year. Parks and Experiences OI increased by 13% year-over-year and Consumer Products OI increased by 7%. Strong international Parks growth was driven by Hong Kong Disneyland Resort, while Walt Disney World and the Cruise business both contributed to domestic growth.
At Disneyland, despite growing attendance and per capita spend, results declined year-over-year due to cost inflation, including from higher labor expenses. We continue to expect robust operating income growth at Experiences for the full year. However, third quarter OI is expected to come in roughly comparable to the prior year. Several non-comparable or timing-related items are expected to adversely impact Q3 results, including timing of media and tech expenses, non-comparable items in the prior year at Consumer Products and the timing of Easter. Beyond these comparability related headwinds, the third quarter's results will be impacted by three additional factors; higher wage expenses, pre-opening expenses related to the Disney treasure and adventure cruise ships as well as Disney Cruise Line's New Island, Lookout Cay, and some normalization of post-COVID demand.
As it relates to demand, while consumers continue to travel in record numbers and we are still seeing healthy demand, we are seeing some evidence of a global moderation from peak post-COVID travel. While pressures from wages, reopening costs and demand impacts are expected to persist in Q4, we do expect year-over-year Experiences operating income growth to rebound significantly in the fourth quarter due to fewer comparability or timing factors. On an Enterprises-level, we continue to make good progress on our cost-efficiency initiatives and remain positioned to exceed our $7.5 billion annualized target. We still expect to generate over $8 billion in free cash flow this fiscal year and the shareholder return goals we've previously spoken about are also still very much on track. We repurchased $1 billion of stock in the second quarter. We continue to position the company for long-term growth and profitability, and are making tangible progress on generating compounding earnings and free cash flow growth, which will enable us to continue returning capital to shareholders.
I'll now hand the call back to Alexia for Q&A.