Aron 'heartened by the strength of moviegoing in March' as theater chain outperforms box office
AMC Entertainment Holdings Inc. narrowed its loss in the company's first-quarter results after the bell Wednesday, and outperformed amid the lingering impact of the Hollywood writers' and actors' strikes, according to Chief Executive Adam Aron.
The movie-theater chain and original meme stock, which previewed preliminary first-quarter results last month, reported a net loss of $163.5 million, or 62 cents a share, compared with a net loss of $235.5 million, or $1.71 a share, in the year-ago period. On an adjusted basis, AMC $(AMC)$ reported a loss of 78 cents a share. Analysts surveyed by FactSet expected a loss of 75 cents a share.
The company reported revenue of $951.4 million for the quarter through March, compared with $954.4 million in the same period last year and above analysts' expectations of $881 million, according to FactSet.
Related: AMC takes a hit from Hollywood strikes but narrows quarterly loss
The company's shares fell 2.5% in extended trading Wednesday.
AMC outperformed in the first quarter, according to Aron. "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," he said in a statement. "Despite a 6% decline in the first-quarter 2024 North American box office compared to 2023, we grew our domestic market share, maintained total revenues in line with the prior year, and continued to grow our per-patron profitability metrics at levels well above pre-pandemic measures."
"This, coupled with proactive cost containment initiatives to tackle the near-term box-office challenges posed by the 2023 Hollywood strikes, led to AMC's outperformance," he added.
Admissions revenue was $530.5 million, above the FactSet consensus of $506 million. Food-and-beverage revenue was $321.2 million, above the FactSet consensus of $312 million.
AMC's adjusted Ebitda was negative-$31.6 million, compared to $7.1 million in the prior year's quarter. However, the prior year's quarterly results included a previously disclosed $16.7 million benefit to adjusted Ebitda related to an early termination of a theater lease, the company said.
The company's cash and cash equivalents was $624.2 million as of March 31.
Related: AMC enjoying box-office 'outperformance' amid post-pandemic recovery, says B. Riley
While AMC's first quarter felt the impact of last year's Hollywood strikes, Aron is optimistic that the box office will rebound. Speaking during a conference call to discuss the results he said that the slate of movies later in 2024, into 2025 and in the first half of 2026 "hold great promise."
The CEO said that second-quarter box office will be sequentially stronger than the first quarter, but will still fall "significantly below" last year's second quarter, which was "the single strongest quarter in all of 2023."
However, he expects a "stronger, healthy and growing" summer box office boosted by forthcoming movies "Deadpool & Wolverine," "Despicable Me 4" and "Twisters." The CEO also pointed to films that will launch in the fourth quarter such as "Joker: Folie à Deux" starring Joaquin Phoenix and Lady Gaga, the musical "Wicked" starring Ariana Grande and Cynthia Erivo, and Walt Disney Co.'s $(DIS)$ "Mufasa: The Lion King."
Also during the conference call, Aron said that the company's per-patron revenue and per-patron profit "continued along their stellar trajectory." The company's food and beverage revenue per patron was $8.08 in U.S. markets, up from $7.99 in the same period last year. Contribution margin per patron was $15.32 in the first quarter, up from $14.59. "There's now a path for AMC to enjoy pre-pandemic Ebitda even with lower revenue," Aron added.
About 82% of food and beverage sales flow to the bottom line, the CEO said. "This whole area has been one of staggering success for us," Aron added. "We're quite optimistic that this growth will continue."
AMC shares have fallen 47.9% in 2024, compared with the S&P 500 index's SPX gain of 8.8%.
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