AMC Suffers $32 Million Loss Amid Q2 Box Office Slump
Revenue falls 23% year-over-year to $1.03 billion, but “Inside Out 2” provides late-quarter surge for theater chain
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The box office slump of April and May led to a poor second quarter for AMC Entertainment, as revenue fell 23% year-over-year and the theater chain slid to a $32 million loss. But company executives touted their recent strides towards resolving the company’s immense debt load.
Here are the top line results:
Net loss per diluted share: 10 cents, in line with estimates from analysts at Zack’s Investment Research, but down from net earnings per diluted share of 6 cents for Q2 2023
Revenues: $1.03 billion compared to $1.35 billion for Q2 2023
Attendance: 50,013,000, down 25% from 66,368,000 in Q2 2023
“AMC saw a remarkable contrast between the early quarter with a dearth of movie releases and the end of the quarter with a record setting movie delighting audiences in our theatres,” Adam Aron, AMC’s chairman and CEO, said in a statement, referring to “Inside Out 2.” “That difference between AMC’s early quarter performance and our late quarter performance was as if we were two totally different companies, surrounded by two completely different industry dynamics.”
In a preliminary report sent last week, AMC said it had been expecting a major drop in Q2 revenue due to release delays caused by last year’s WGA and SAG-AFTRA strikes, including for “Deadpool & Wolverine,” which has already made more than $600 million in its opening week in theaters after being delayed from its initial May release slot.
That absence from the May calendar, combined with a lower quantity of major releases in Q2 and the poor performance from Universal’s “The Fall Guy” and Warner Bros.’ “Furiosa,” caused domestic grosses for April and May to reach just $980 million, down 42% from the $1.67 billion grossed in that same span last year.
In June, fortunes for AMC and theaters as a whole began to rebound with Disney/Pixar’s “Inside Out 2,” which is now the highest grossing animated film ever in North America. That helped lift domestic quarterly grosses to $1.97 billion, but that still represents a 27% drop year-over-year.
Still, AMC CEO Adam Aron repeated his assertions made in past quarterly reports that a turnaround would be coming, starting in the second half of 2024. That has already proven to be the case, as the success of Universal’s “Twisters,” Illumination’s “Despicable Me 4,” and Disney/Marvel’s “Deadpool & Wolverine” lifted July domestic grosses to $1.17 billion. While that was down 13% from last year’s “Barbenheimer” fueled boom, it is slightly above the $1.13 billion posted in July 2022.
While it looks for a brighter box office future, AMC announced last week that it reached a deal to restructure its $4.5 billion debt load, taking $1.6 billion of that debt set to mature in 2026 and extending that date to 2029 and 2030. The chain also arranged for the potential repurchase of up to $800 million of additional existing debt due in 2026, as well as issuing $414 million of new debt due in 2030.
“AMC continues to be confident that industry-wide movie revenues for the second half of 2024, and into 2025 and 2026 will continue to show increasing strength,” Aron said in the company’s preliminary report. “This in turn suggests that AMC should enjoy increasing adjusted EBITDA, if as and when overall industry revenues are climbing. Such improvements in revenues, earnings and adjusted EBITDA are our current expectations going forward, all of which shine brightly on AMC’s future.”
AMC released its earnings after the stock market was closed. Shares closed down 3.5% during Friday’s trading session and were up about 1% in after-hours trading.
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