Regal’s Q3 Profits Get Sugar Rush From Candy Sales

With “Minions” and “Inside Out” drawing kids, revenues from concession sales spike by 17 percent

Milk Duds, Red Vines and Raisinettes helped make the difference when the nation’s largest theater chain, Regal Entertainment Group, reported its third quarter earnings Tuesday.

Profits climbed to $126.6 million from $122.5 million despite a softer-than-expected box office in the quarter, in part due to a 17-percent spike in concession revenue that offset flat movie ticket returns.

Regal’s third quarter revenues rose to $725 million from $693.8 in the period while its net income fell to $21.9 million from $26.7 million versus Q3 2014.

But with the hit animated family films “Minions” and “Inside Out” driving ticket sales, the increased consumption of snacks and sodas resulted in a more than 10 percent gain in concessions sales.

“Food and drink sales per patron of $4.19 grew by 10.6 percent and bested our previous record high by 27 cents,” said David Ownby, Regal’s executive vice-president and chief financial officer.

Beverage revenue rose 2.2 percent and popcorn receipts were up 2.4 percent, but candy sales led the way with a 3.8 percent gain. Theaters keep roughly 85 percent of the money they bring in on snacks and drinks.

The fact that kids still love sweet stuff had to offer some comfort to executives at Regal and other theater chains, at a time when moviegoers are staying home more often, Netflix is invading their turf and the government is conducting an anti-trust probe.

The box office provided $469 million of the revenues, while concession sales accounted for $214 million and $40.4 million came from other units. Admissions rose 2.2 percent but revenue fell due to a drop in premium ticket sales for 3D. The company saw a return of $9.29 on each ticket sold.

Diluted earnings per share was $0.14 for the third quarter of 2015 compared to $0.17 for the third quarter of 2014. Regal’s Board of Directors also declared a cash dividend of $0.22 per Class A and Class B common share, payable on Dec. 15 to stockholders of record on Dec. 4.

Regal is the most geographically diverse as well as the largest U.S. theater circuit in the U.S., with 7,295 screens in 565 locations across 44 states. The three main brands operated by Regal Entertainment Group are Regal Cinemas, Edwards Theatres and United Artists Theatres.

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