AMC and Cinemark yet to reclaim 'pre-COVID glory' as foot traffic still well below pre-pandemic levels, research finds

By James Rogers

Movie-theater chain and original meme stock AMC reports first-quarter results after market close Wednesday

Movie-theater chains AMC Entertainment Holdings Inc., Cinemark Holdings Inc. and Regal Cinemas are still seeing visitor numbers well below pre-pandemic levels, according to foot traffic data from analytics company Placer.ai.

Compared to 2019, visits to AMC (AMC) locations were down 64.6% in April, 45.4% in March, and 51.3% in February, said Placer.ai. On a year-over-year basis, visits were down 49.4% in April, and down 10.8% in March, the data-analytics company said. AMC reports first-quarter results after market close Wednesday.

It's a similar story at Cinemark (CNK), according to Placer.ai, with visits down 48% in April, 20.6% in March, and 28.2% in February compared to the same months in 2019. On a year-over-year basis, visits were down 50.4% in April and 14% in March.

Related: AMC's stock registers biggest decline in a month after preliminary first-quarter results

Visits to Regal locations were down 66.7% in April compared to April 2019, 45.6% in March, and 49.5% in February, Placer.ai said. Year-over-year, visits were down 50.3% in April and 9.7% in March.

"Cinemas have yet to reclaim their pre-COVID glory - and during the first few months of 2024, visits to AMC and Regal, and to a lesser extent Cinemark, remained substantially below 2019 levels," Placer.ai said in a blog post. "While some of these visit gaps can be attributed to exhibitors downsizing their real-estate portfolios, the rise in at-home entertainment continues to impact pre-pandemic foot-traffic comparisons."

The relative absence of new blockbusters took its toll on theater operators' performance in early 2024, according to Placer.ai, which also pointed to the success of early 2023 smash hits such as "Avatar: The Way of Water," "Ant Man and the Wasp: Quantumania" and "The Super Mario Bros. Movie."

Related: AMC enjoying box-office 'outperformance' amid post-pandemic recovery, says B. Riley

However, citing demographic data from STI: PopStats, Placer.ai found that today's movie-goers are more affluent than before COVID. "For exhibitors, the increase in visitors' spending power presents an important opportunity: Affluent movie-goers are likely to spend more on revenue-boosting concessions and premium formats, a boon for theater chains at a time when visit gaps linger," Placer.ai said in its blog post.

AMC previewed its first-quarter results last month, citing the impact of last year's writers' and actors' strikes in Hollywood, but the movie-theater chain and original meme stock still managed to narrow its quarterly loss.

The company said it expects revenue of about $951.4 million for the quarter through March, compared with $954.4 million in the same period last year and analyst expectations of $861 million, according to FactSet.

Related: AMC debt extension would be 'key' as company looks to clean up balance sheet, says Wedbush

AMC said it expects a net loss of $163.5 million, or 62 cents a share, compared with a net loss of $235.5 million, or $1.71 a share, in the year-ago period. FactSet analysts forecast a loss of 79 cents a share.

The company outperformed despite the strikes, Chief Executive Adam Aron said in a statement. "While we anticipate that the second-quarter box office will continue to be affected by the 2023 Hollywood strikes, we are ebullient about the upcoming film slate, and we expect to see an increasingly strong box office as the year progresses," Aron said.

Analyst firm B. Riley Securities says that AMC is reaping the benefits of a post-pandemic box-office recovery.

Related: Cinemark poised to reap the benefits of a better box office, says Wedbush, raising price target and estimates

Cinemark reported a revenue decline amid fewer visitors in its first-quarter results last week. The company entertained 40 million guests in the quarter, down 8% from the same period last year, according to an investor presentation. Cinemark attributed this to fewer movies as a result of the Hollywood strikes. However, the company anticipates a recovery in content volume toward pre-pandemic levels in 2025 and 2026.

"We continue to remain bullish about the resurgence of film volume over the coming years," said Cinemark CEO Sean Gamble, during a conference call to discuss the results. "Production is now fully up and running again, following last year's strikes, new significant entrants like Amazon and Apple are meaningfully scaling into theatrical exhibition and nontraditional content like concerts, faith-based films, multicultural titles and anime, is also growing."

AMC, and Regal parent Cineworld did not immediately respond to requests for comment.

AMC shares ended Tuesday's session down 3%, while Cinemark's stock rose 2.2%.

-James Rogers

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05-07-24 1831ET

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