Movie theaters can’t sell tickets if they don’t have a lot of new blockbusters to advertise on their marquees. And the actors and writers strikes that ground Hollywood to a standstill in 2023 left studios with fewer movies to release as 2024 got started. As the biggest exhibitor in the world, AMC Theatres certainly felt the lack of franchise movies and tentpole films as the year kicked off, but the company still managed to beat projections with its quarterly earnings. That was partly thanks to the March release of “Dune: Part Two” and “Kung Fu Panda 4,” popular sequels that helped off-set declining admissions in January and February.
Despite the late breaking entry of some must-see movies, revenues at the the theater chain fell to $951.4 million from $954.4million in the prior-year quarter. However, net losses for the three month period ending in March narrowed to $163.5 million, or 62 cents per share. That was an improvement on the $235.5 million or $1.71 per-share that AMC lost in the prior-year period. Wall Street predicted that the theater chain would report earnings of 79 cents per share, as well as revenue of $871 million, according to Benzinga Pro.
“We’re pleased to report that AMC outperformed in the first quarter,” Adam Aron, chairman and CEO of AMC, said in a statement, adding, “We had expected for some time the Hollywood actor and writer strikes of 2023 would impact the first quarter box office but were heartened by the strength of moviegoing in March which reminded us that better times are ahead.”
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Attendance at AMC locations dropped 2.1% to 46.6 million, while admissions revenues fell to $530.5 million from 534.1 million in the year-ago period. Food and beverage revenues dipped to $321.2 million from $328.7 million. But AMC was able to off-set that by reducing its operating costs.
Despite the brighter than expected financial picture, shares of AMC fell more than 1.5% in after-hours trading. AMC, which is heavily leveraged, has faced scrutiny about its longterm viability because it has roughly $4.7 billion in long-term debt. The company noted that during the quarter it had “successfully reduced our debt principal by another $17.5 million” through a debt for equity swap. The company had seen its share price soar during the pandemic, joining the likes of GameStop as a meme stock. But times have changes and AMC is now trading on fundamentals, forcing its stock back down to Earth.
As Hollywood studios have reduced their output, AMC has looked elsewhere for content to put on its screens. Last year, the company released concert films from Beyonce and Taylor Swift tied to their Renaissance and Eras tours. In that spirit, AMC said it will sponsor special listening events tied to the release of Billie Eilish’s next album, “Hit Me Hard and Soft” this month. AMC also stressed new snack and refreshment offerings, including donut holes and, on the other side of the calorie scale, salads.
But it ultimately will come down to the movies, and on a call with analysts shortly after earnings were released, Aron stressed that the upcoming slates in 2025 and 2026 looked strong, bringing with them sequels to “Jurassic World,” “Mission: Impossible,” “Star Wars” and “Avatar.”
“Things are looking up,” Aron said. “Hallelujah, let the significantly better times roll,” he added.
