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 easing the company’s immense debt load and insisted that June was a turning point for the global box office.
Here are the top line results:
Net loss: $32.8 million, down from net earnings of $8.6 million in the year-ago period.
Net loss per diluted share: 10 cents, in line with estimates from analysts at Zack’s Investment Research, but down from net earnings 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.”
As one indicator of that pivot, in June of 2024 AMC achieved its highest-ever June adjusted EBITDA in the company’s 104-year history, Aaron said.
Importantly, AMC executed transactions in the quarter that extended the due dates for $2.45 billion in debt from 2026 to 2029 and 2030, giving the company a crucial lifeline to turn around its business, which has yet to return to pre-pandemic levels. The company had $8.45 billion of total debt on its balance sheet as of March 31. “AMC’s lenders just gave us a strong vote of confidence,” Aaron said.
The theater company 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, 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.
AMC executives stressed on Friday that in addition to extending its debt obligations, the company had maintained financial discipline amid the tough box office conditions. The company ended the second quarter with $770 million in cash and touted an all-time high U.S. food and beverage per-patron-average of $8.34.
“With a long list of blockbuster movie titles opening in theatres during the remainder of the year and into 2025 and 2026, the industry-wide box office now appears to us to be poised for sustained growth,” Aaron said. “Looking ahead, we
believe that bodes ever so well for the increasing cash generation potential from AMC’s movie theatres both at home and abroad.”
AMC released its earnings after the stock market was closed. Shares dipped 3.5% during Friday’s trading session and were up less than 1% in after-hours trading.
