October 3, 2022
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AMC Entertainment Is Almost Ready to Party Like It’s 2019

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At first glance, the final weekend of the second quarter wasn’t spectacular for theater operators. Not a single movie topped $32 million in domestic box office receipts. It’s the first time we’ve seen that in nearly two months. However, we also had five movies clocking in with 10 figures in ticket sales proceeds each, something we haven’t seen since Valentine’s Day weekend in 2020. 

The news gets better. With several movies drawing sizable crowds, we’re actually close to the pre-pandemic levels that many bears thought we would never see again.

Year-over-year comparisons don’t hold a lot of weight in assessing the health of the industry. Stacking up performances against 2019 — the last full year before the COVID-19 crisis temporarily shuttered multiplex operators and studio productions — is standard. Looking out to all of 2022, one can argue that we still have a long way to go. Gross ticketing revenue is down 34% year to date from where we were three years ago. Narrowing our focus to the second quarter only, we’re down 27% quarter to date. Zoom in to just the final weekend of the second quarter, and box office revenue is down just 11% from 2019. 

Theater goers at a crowded multiplex enjoying laughs and snacks.

Image source: Getty Images.

Making a scene

There’s a lot riding on this summer for AMC Entertainment Holdings (AMC -3.57%) and its smaller peers. Hollywood is done delaying movie releases as it did through the first two years of the pandemic. The studios are also starting to grant theatrical exclusivity for the first few weeks of a new popular film instead of feeding premium streaming services the way they did early in the COVID-19 crisis. 

Consumers are also feeling more comfortable venturing out to the movies. This past weekend was a perfect example, with five big movies attracting entirely different audiences. Elvis and Top Gun: Maverick attracted nostalgic audiences of different ages. Jurassic World: Dominion drew fans of one of the largest film franchises. Lightyear is still wooing families despite controversies. The Black Phone caps off the five big films of this past weekend, giving horror fans a creepy thriller that’s winning critical raves. 

This is what the movie industry is supposed to look like. It’s not the weird release slate we’ve seen over the past two years, with blockbusters coming out months apart. This is why someone like me who has been skeptical of the industry and its long-term prospects has no problem turning bullish through at least this summer. Things are getting back to normal, and we’re just getting started. 

If Lightyear is failing to generate big box office numbers, the feature animation niche should be filled out convincingly by Minions: The Rise of Gru this weekend. Next weekend we’ll see the premiere of Marvel’s Thor: Love and Thunder kick in the superhero element that’s been missing so far this season.

As for AMC itself, the news is even better. This weekend’s ticket sales are 11% below where we were for the final weekend of the second quarter in 2019, but that doesn’t mean that AMC generated 11% less revenue. It’s been taking steps to gain market share during the lull. It’s also doing a better job of getting folks to spend more money on food and beverages at the concession stand. Just as we’ve been seeing theme park operators drum up more money with fewer guests, per capita spending is also on the rise at the corner multiplex. This summer is playing out a lot better for movie theater stocks than you probably think.





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