The theater giant closed the first quarter of 2024 in red. CEO Adam Aron said Q2 performance will be even worse.
AMC Entertainment, the parent company of AMC Theaters, reported an overall decline in revenues in the January-March 2024 period. Though the fall was better than Wall Street expected, the movie theater giant reported a loss in the first quarter.
Revenues came in at $951.4 million, down exactly $3 million from the same quarter last year and beating analysts’ expectations of $871 million. Net losses for the quarter amounted to $163.5 million, a significant improvement from last year’s $235.5 million.
The fall in revenues did not exactly match the 6% decline in overall cinema attendance. Box office hits like Dune: Part Two and Kung Fu Panda 4 rebounded AMC’s revenues in March from a 20% decline in January and February.
Raw attendance numbers for AMC Theaters amounted to 46.6 million patrons in Q1, down from 47.6 million in the year-ago period. The first quarter of 2023 saw a boost in attendance thanks to Avatar: The Way of Water ($280 million worldwide in Q1) and Ant-Man and the Wasp: Quantumania ($211 million worldwide in Q1).
The United States suffered the worst decline in attendance at 30.4 million patrons compared to 32.3 million last year. International markets, however, increased in attendance to 16.1 million compared to 15.2 million last year.
Weathering the storm
The decline in AMC revenues came from the backlog of the Hollywood strikes last year, which delayed productions and releases for months.
AMC Entertainment CEO Adam Aron said he expects an even worse decline in Q2. In the April-June period last year, box office hits like Super Mario Bros, Guardians of the Galaxy, and Spider-Man brought attendance to its highest levels since COVID-19.
The global box office has yet to recover from the pandemic, though 2023 and 2022 registered slow growth. The Hollywood strikes are the second crisis hitting the global entertainment industry in four years.
However, Aron said AMC will most likely weather the storm. With $624 million in cash at the end of the quarter and a further $124.1 million raised from equity capital, the theater giant should absorb the blow.
“Despite a 6 percent 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,” Aron said. He added that once the effects of the strikes go away, numbers should start growing again.
“Everything that I see tells me 2025 and 2026 are going to be gangbusters,” Aron concluded.
