AMC Entertainment reported revenue of $764 million and earnings of 24 cents a share early Monday, becoming the latest theater chain to disappoint in the wake of a slumping summer box office.
That performance fell short of AMC’s performance during the same period last year, when it recorded $821 million in revenue and earnings of 45 cents a share. It also failed to reach analyst estimates of $773 million in revenue and earnings of 27 cents a share.
The weak summer movie slate weighed on the Leawood, Kan. theater chain — soon to be the biggest movie theater company in the world.
“It would ordinarily be difficult to be pleased with a quarter in which a lackluster film slate caused us to share in the industrywide box office revenue decline that was down domestically some 10.7 percent per screen year-over-year,” Adam Aron, AMC CEO and president, said in a statement accompanying the earnings. “However, we are encouraged that this trend has already reversed itself with industry box office revenues up more than 7 percent as of July 29th, and a potentially record setting film slate being close at hand for calendar year 2017.”
Last week, AMC upped its bid to acquire rival theater chain Carmike Cinemas, the U.S.’s fourth-largest theater chain with 274 locations (AMC currently has 385) to $1.2 billion. Carmike’s board approved the deal, which is expected to close by the end of the year.
Since being acquired by China’s Dalian Wanda Group in 2012, AMC has given many of its theaters significant facelifts. That includes everything from increasing the amount of premium-format IMAX and Dolby-equipped theaters to reclining seats and dine-in offerings. AMC also owns clusters of theaters in high-rent urban locations, such as west Los Angeles and New York. Carmike, on the other hand, operates most of its theaters in more rural areas and at a lower price point.
Regal Cinemas, which AMC will surpass to become the largest cinema chain in the U.S. when it absorbs Carmike’s locations, foreshadowed AMC’s troubles when it reported disappointing earnings last week.
The first three months of the year were loaded with hits such as “Zootopia” and “Jungle Book” — not to mention residual “Star Wars: The Force Awakens” business — but April through June has been relatively bereft of true theater-fillers. Despite its bells, whistles and massage chairs, AMC also couldn’t overcome the lack of marquee titles during the spring and early summer movie season.
In addition to the acquisitions it’s making through AMC — AMC also agreed to acquire the biggest European theater chain, Odeon-UCI, last month in another a deal valued at $1.2 billion — AMC parent Wanda has been rolling up cinema companies around the world over the last few years, including Australian chain Hoyts. Its Wanda Cinema Line is China’s biggest theater chain, and through all its cinema subsidiaries, Wanda is IMAX’s number one customer worldwide, with AMC being its biggest U.S. partner.
The company will hold a conference call at 8:30 a.m. ET to discuss the earnings report.