A great thing happened for theater chains in the midst of dour earnings for the strike-challenged quarter ended in June: Deadpool & Wolverine. The film, which is setting multiple records, also is inflating exhibition stocks and generating nice Wall Street reviews for a sector that’s been on-and-off shaky since Covid.
Shares of AMC Entertainment, Imax, Cinemark, Marcus all saw gains during the past three or four sessions and are up again today.
The biggest chain globally, AMC Entertainment, said Thursday through Sunday set 2024 records for weekend attendance and admissions revenue in the U.S. and at its Odeon Cinemas internationally as Deadpool & Wolverine set a new all-time opening weekend high for a rated-R film.
That helped drive the highest food-and-beverage revenue for a single weekend since 2019. Busy sales of merchandise such as branded popcorn buckets and collectable drink toppers eclipsed 2024 record-holder Despicable Me 4 and is second only to last year’s concert film Taylor Swift: The Eras Tour.
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“AMC has been predicting for quite some time that moviegoing would return to lofty levels this summer,” said CEO Adam Aron.
Regal, the nation’s no. 2 chain, said the film repped its highest R-rated, 3-day opening weekend ever, and the highest 4DX weekend for Regal of all time.
The third-largest U.S. chain, Cinemark, saw record breaking box office and concessions as well. Ticket sales beat out every other film opening from May through August in the exhibitor’s history. It also was the biggest opening weekend ever for Cinemark XD, the company’s private-label premium large format, and an all-time high weekend for D-BOX motion seats. “We remain highly optimistic about the future of theatrical exhibition,” said CEO Sean Gamble.
Hollywood actors and writers strikes last year delayed production significantly, leaving a dearth of product into 2024. AMC swung to a loss for the second quarter as revenue fell. The tentpole market ramped up in June with Inside Out 2, followed by Despicable Me 4 and Twisters this month, then Deadpool & Wolverine.
The weekend, and the cadence, highlights opportunity for the sector with a more consistent film slate for the second half of 2024 and 2025, said B. Riley Securities analyst Eric Wold, reiterating a “buy” rating on Cinemark, Imax, Marcus and in-theater advertising firm National Cinemedia. He said D&W’s strong run should help allay concerns about “moviegoer burnout” with the Marvel Cinematic Universe.
Alicia Reese of Webush Securities says Imax remains on the firm’s Best Ideas List as it gains market share, expands its filmed-for-Imax partnerships and diversifies with more alternative content like original docs and live events, including a live broadcast of the Paris Olympics opening ceremony. The big screen company beat Wall Street estimates by a wide margin in its June quarter.
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She has an “outperform” recommendation on Cinemark, saying it preserved cash during this box office slowdown and that it’s committed to shoring up its balance sheet, maintaining its leverage ratio, investing in its circuit, evaluating M&A opportunities and reinstating its dividend.
There’s still some wait-and-see wariness on volatile AMC, where there’s been good news beyond this past weekend’s box office. The company recently agreed with lenders to refinance a big chunk of its debt. This morning, it announced a new concert film, Usher: Rendezvous in Paris for September release.
AMC pre-reported earnings last week and will release its final numbers Friday. Cinemark releases its quarterly numbers that day as well.
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Wall Streeters and companies alike are noting anticipated upcoming films this year including It Ends with Us and Borderlands on August 9, Alien: Romulus on August 16, Beetlejuice Beetlejuice on September 6, The Wild Robot on September 27, Joker: Folie à Deux on October 4, Venom: The Last Dance on October 25, Gladiator II and Wicked on November 22, Moana 2 on November 27, Kraven the Hunter on December 13, Mufasa: The Lion King and Sonic the Hedgehog 3 on December 20.
AMC share have popped about 11% from last Thursday’s open, changing hands in afternoon trading at about $5.21.
Regal, part of Cineworld of the U.K., isn’t publicly traded.
Cinemark has gained 1.29% today to about $22.85, not that far from its 52-week high.
Imax is up 2.6% today at $20.40 – also very close to its high over the past 52 weeks.
Marcus is up about 1% today at $12.59.