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The nation’s third largest theater chain saw sales jump 50% and losses narrow sharply last quarter, underscoring the rebound of moviegoing despite a sluggish release schedule in August and September.
“We have high confidence in the ongoing recovery of content and box office as delays caused by Covid fully subside, and studios derive increasing promotional and financial value from theatrical,” said CEO Sean Gamble. In an investor call following earnings, the chief executive took pains to lay out the main drivers of the business — three and clear: consumer interest in films; the availability of films; and the value of theatrical release to providers of filmed entertainment.
The first is a big ‘yes’ check — consumer interest is “vibrant,” Gamble said. As that becomes increasingly evident, “We see studios leaning more heavily back into theatrical.” That said, the pipeline is still limited by production lags from Covid and “will take a couple of years to get fully back to where it was.”
Meanwhile, he’s “very optimistic” that “not just traditional studios, but streamers will also lean more heavily into theatrical. We are getting signs from them.” That will fill gaps in the slate. Eventually, considering all the players out there making movies, “We could find ourselves with more volume than we ever had.”
It’s needed. Cinemark today, and Marcus Theatres yesterday both cited “headwinds” on per capita ticket and concession sales for the third quarter from National Cinema Day. The initiative to draw people into theaters on Sat., Sept. 3 with tickets and snacks costing $3 attracted 8.1 million moviegoers nationwide. But Marcus CEO Greg Marcus noted yesterday on that company’s earnings call, it was somewhat wasted because there wasn’t enough upcoming product to showcase to be able to sustain momentum.
Cinemark, based in Plano, Texas, reported revenue of $650 million. Admission revenue was $325 million, concession sales were $254 million, driven by 48.4 million moviegoers. Average ticket price was $6.71 and concession revenue per patron was $5.24.
Its net loss narrowed to $24.5 million from $77.8 million. EPS was a negative $0.20 from negative $0.65. Adjusted EBITDA grew to $99.5 million from $44.3 million.
“We remain highly optimistic about the future of theatrical exhibition and Cinemark,” Gamble said. “Consumer behavior over the past year validates that moviegoing enthusiasm remains strong and vibrant across all categories of films and audiences. Quarter after quarter, genre by genre, we’ve seen long-standing records broken and films performing at levels comparable to, or better than, pre-pandemic expectations.”
A key today is how strong exhibitors were financially going into Covid, and Cinemark was solid. And how successful they are in navigating what Gamble called a highly fluid environment in content, supply chain and labor dynamics.
The company’s share are trading up over 5% today.
The circuit includes the Century, Tinseltown and Rave brands, operating 517 theatres with 5,835 screens in 42 states domestically and 15 countries throughout South and Central America.