The third quarter of 2023 was strong for AMC Theaters thanks to the box office windfall of Universal’s “Oppenheimer” and Warner Bros.’ “Barbie,” with revenue rising 45% year-over-year to $1.4 billion to allow the theater chain to turn a profit for the second straight quarter and post the highest Q3 revenue in company history.
The Leawood, Kansas-based company faces significant costs that have eroded much of its potential profit, but was still able to report earnings of $12.8 million or 8 cents per share. That beats consensus Wall Street projections of $1.25 billion in revenue for a loss of 22 cents per share, according to Zacks Investment Service.
“What is perhaps most impressive of all is that our success in the third quarter came at a time when our attendance at the domestic box office in the quarter was still 16% below comparable 2019 levels,” said AMC CEO Adam Aron. Attendance reached 73.5 million in Q3, the highest quarterly attendance for the chain since the COVID-19 pandemic.
Aron commended the return of high-profile titles from Hollywood studios to bring moviegoers back, but called attention to the moves that his company made to control its costs and to increase the amount of revenue per moviegoer by 30% compared to Q3 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 significantly increased per patron spend, especially in our high-margin food and beverage business, the pruning of our theatre fleet by closing marginal theatres and opening successful new ones, as well as a continued focus to manage expenses in a challenging inflationary environment,” Aron continued.
AMC made a big splash towards the end of Q3 by announcing that it would be releasing Taylor Swift’s concert film “The Eras Tour” directly through a partnership with independent distributor Variance Entertainment. Since its October release, the film has grossed $166 million in North America and has provided theaters with much needed box office support. AMC and Variance will continue to release concert films with Beyonce’s “Renaissance” this December.
AMC will need all the extra help it can get, as the chain still faces significant uncertainty in the face of the SAG-AFTRA strike. Aron has warned repeatedly that a prolonged strike that leads to delayed releases from major studios could damage AMC’s ability to bring in enough revenue to cover its expenses and maintain its cash reserves, which allowed it to withstand the financial damage of the pandemic.
“The short-term impacts of the writers and actors strikes will cause additional and needless challenges for AMC in 2024,” Aron said. “Without taking sides as to who is to blame and how the labor challenges should be resolved, we strongly encourage all the parties involved to come to the negotiating table with the intent of reaching an agreement immediately.”
While insiders told TheWrap that SAG-AFTRA and studios are close to making a deal, several films that were set for release in 2024 have been moved, including Paramount’s “Mission: Impossible 8,” Disney’s “Snow White and the Seven Dwarfs” and Pixar’s “Elio.”
“There has been and will be much collateral damage from these lengthy work stoppages,” Aron added. “For the benefit of all involved in the movie ecosystem, this months-long disharmony needs to come to an end now.”
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