AMC Entertainment swung to a profit last quarter and saw revenue rise 45%, beating Wall Street forecasts. CEO Adam Aron found the numbers “quite satisfactory.” But, he said, the short-term effects of the writer’s and actors’ strikes will cause additional and unnecessary challenges for AMC in 2024. Without taking sides on who is to blame and how the labor challenges should be resolved, we strongly encourage all parties involved to come to the negotiating table with the aim of reaching an agreement immediately.”
Exhibitors are extremely nervous as films big and small continue to shift release dates and are reluctant to open without actors to promote them.
AMC made solid progress last quarter, rising to a $12.3 million profit in the September quarter from a $227 million loss a year earlier. Sales rose to $1.4 billion. Barbie and Oppenheimer released at the end of July were standouts. The results did not include Taylor Swift: The Era Tour, which only opened after the third quarter ended. It has grossed around $232 million worldwide since its October 13 opening. Renaissance: A Film by Beyoncé will debut December 1st. AMC distributes both and launches a lucrative new business line.
Aron noted that AMC’s strong performance “came at a time when our domestic box office participation in the quarter was still 16% below comparable 2019 levels. That success was because our contribution per customer was up 30% over 2019. Our overall profitability has improved in part from all the actions we have taken over the past three and a half years, including innovative marketing and pricing initiatives that have increased significantly per customer spend, particularly in our food and beverage business with high margins, trimming our theater fleet by closing marginal theaters and opening successful new ones, as well as a continued focus on managing expenses in a challenging inflationary environment.”
Diluted earnings per share improved $0.08 compared to negative $2.20 a year ago. Adjusted EBITDA increased to $194 million from negative $12.9 million.
Net cash provided by operating activities improved by $289.5 million to $65.9 million, cash generated was $108.7 million, an improvement of $287.9 million from a year ago. Liquid stocks per September 30 was $729.7 million.
Regarding the strikes, he also said: “Without taking sides on who is to blame and how the labor market challenges should be resolved, we strongly encourage all parties involved to come to the negotiating table with the aim of reaching an agreement immediately. There have been and will be major collateral damage from these extended layoffs. For the benefit of everyone involved in the film ecosystem, this months-long disharmony must end now. Whether you’re thinking of a studio executive or a union member in the creative community, it’s always so important , that everyone in Hollywood gets back to the task of creating world-class entertainment that is widely admired and enjoyed around the world.”