Cinemark blew past Wall Street projections for the second consecutive quarter, reporting revenue of $942.3 million Friday for the three months ending in June as the box office continued its post-pandemic recovery.
The results came off the back of hit films like “The Super Mario Bros. Movie,” “Guardians of the Galaxy Vol. 3” and “Spider-Man: Across the Spider-Verse” and represented a 27% leap in revenue over last year’s $744.1 million.
The Plano, Texas-based company posted net income of $119.1 million, or 80 cents per share, besting consensus projections of 54 cents per share. That reversed a year-ago loss of $73.4 million, or 61 cents per share.
The results sent Cinemark shares higher. The stock gained 50 cents, or 2.9% to $17.82 in morning trading. Shares closed Thursday at $17.32, more than doubling since the start of the year.
Admissions represented $478.4 million of the quarter’s revenue, up 25% from the $381.9 million in the 2022 quarter and reflecting a 6% gain in average ticket price versus last year.
Concession sales jumped 30%, to $373.4 million from $286 million last year and notably topped the 2019 second quarter, despite lower attendance levels. CFO Melissa Thomas said during the conference call to discuss the results that concessions per capita hit a record $7.64, thanks to strategies around pricing and sales-driving efforts like online ordering and self-service options.
In its international segment, which includes theaters throughout Central and South America, revenue shot up 46% to $339 million, from $231.8 million last year.
The company, the third-largest theater chain in the U.S. with 5,812 screens in 42 states and 14 countries, said 64.4 million moviegoers passed through its doors during the quarter — including 38.8 million domestically — a 24% increase over last year, representing a further recovery from the pandemic.
“The strength of the second quarter’s film lineup, supplemented with the ongoing benefits we are achieving from our strategic initiatives, translated into exceptional second quarter results across our entire global footprint,” said Cinemark CEO Sean Gamble in a statement.
“We believe box office performance witnessed year-to-date, and over the past two years, provides conclusive evidence that consumer enthusiasm to view compelling films in a shared, larger-than-life, cinematic environment is as strong as ever,” Gamble said. “We remain confident in the long-term fundamentals of theatrical exhibition, and Cinemark is well-positioned to capture an outsized portion of our industry’s ongoing recovery.”
Box office grosses in the U.S. and Canada reached $2.67 billion in the second quarter, up 15% from 2022, when “Top Gun: Maverick” became the biggest film of the summer.
The quarter began with the release of “The Super Mario Bros. Movie,” which currently stands as the highest-grossing film of the year and the highest ever for Illumination with $574 million domestic and $1.35 billion worldwide.
That momentum continued into the summer season with films like “Guardians of the Galaxy Vol. 3” ($353.6 million domestic gross in the quarter), “The Little Mermaid” ($277.4 million) and “Spider-Man: Across the Spider-Verse” ($331 million).
Gamble has noted that the third quarter should bring more year-over-year increases thanks to the runaway success of Universal’s “Oppenheimer” and Warner Bros.’ “Barbie,” which have combined for over $570 million in domestic grosses and $1.25 billion worldwide.
“If there was any question about the strength of theatrical viewing habits coming out of the second quarter, take a look at what just happened in July,” Gamble said during the conference call, noting that the month delivered Cinemark’s biggest single month of admissions revenue in the company’s history.
The CEO said he is watching the progression of the Hollywood strikes closely. “Their degree of impact on near term film volume and box office will ultimately depend on how long negotiations progress,” he observed. “We certainly remain hopeful for a timely resolution, not only with regard to implications for the theatrical exhibition industry and our studio partners, but also for the sake of the many individuals within the extensive creative community are directly affected by this work stoppage.”
“While the strikes are currently delaying the production of new films, and they have the potential to shift certain movie releases, which could extend the recovery trajectory of theatrical film volume a bit, it’s important to recognize that there has been nothing to suggest that they will affect key fundamentals associated with consumer interest in movie going or studio intentions to rebuild overall theatrical film output over the coming years,” he said.
Theaters have also seen strong numbers this past month from the breakout indie hit “Sound of Freedom” and are expected to see more sustained audience turnout in August and September from films like “Teenage Mutant Ninja Turtles: Mutant Mayhem” and “The Equalizer 3.”
These smaller titles “have made a big advance this year versus last year, but that’s an area that’s still to fill in,” Gamble said, noting that the top five films in this year’s second quarter grabbed about 62% of box office receipts, versus 53% in 2019.
Such films, while not expected to be end-of-year chart toppers, were not present this time last year, when a lack of new films caused monthly grosses to sink to lows not seen in more than 20 years.
Gamble pointed to expectations that newer productions from Amazon and Apple will help bolster theatrical release schedules in coming years, noting Amazon has publicly said it plans to have eight to 12 films a year premiere in theaters, with Apple also indicating similar output. “That level of volume is commensurate with a major studio,” he told analysts on the call, adding that it would “obviously provide a huge tailwind in terms of overall volume over time.”
Gamble also sees potential growth in new alternative content categories like faith-based films like “Sound of Freedom,” as well as multicultural films aimed at diverse audiences. “The appetite for a wider audience base to go view these types of multicultural films is picking up,” he said, also pointing to live events like concerts and gaming as opportunities. “We think there’s a lot of ongoing potential here, and if anything, we think there’s there’s a bit more growth than where we’re currently at. based on some of the trends we’re seeing in this categories.”
Cinemark also sees its premium offerings, from large screen formats to D box motion seats, as a growth area.
In another sign of recovery from the pandemic, Cinemark said during the quarter it paid down $100 million in debt.