AMC Entertainment Holdings Inc. reports its fiscal first-quarter results Friday, with Wall Street eager to see whether the movie-theater chain and meme-stock darling can harness a rebound in cinema attendance.
Analyst firm Wedbush expects AMC’s
AMC,
first-quarter domestic attendance to be up 23% year over year. Theatrical exhibition is on the path to postpandemic normalization, with an improving release slate in 2023, according to Wedbush analyst Alicia Reese. “Our early estimates are for 2023 North American box office to end up 12% over 2022 (~75% of 2019 box office), with AMC at least maintaining its 22% market share if not expanding with its vast network of premium large format screens,” she said in a note released Thursday. “We expect European box office to improve over time as AMC updates its circuit in the region.”
AMC recently enjoyed a strong Easter weekend box office, boosted by the success of “The Super Mario Bros. Movie” and “Air,” which recounts the origin of the iconic Air Jordan basketball shoe.
“WHAT A WEEKEND. It’s official,” AMC CEO Adam Aron tweeted on April 10. “Record revenues for AMC at our U.S. theatres on Easter weekend thanks to strong attendance and superb food and beverage sales. 3.6 million people watched Mario, Air Jordan and more stories on the big screen at AMC! The path to recovery continues.”
Related: AMC growth estimates raised by Benchmark, citing box-office performance
Set against this backdrop, analyst firm Benchmark recently raised its growth estimates for AMC, citing better-than-expected domestic box-office performance.
In a recent report, analytics company Placer.ai said that AMC, Cinemark Holdings Inc.
CNK,
and Cineworld Group Plc.’s
CINE,
Regal Cinemas are benefiting from a rebound in cinema attendance.
However, location-intelligence company Gravy Analytics said that AMC’s first-quarter foot traffic declined 7% year over year, although that was less of a drop than its rivals. Gravy Analytics also noted a foot-traffic uptick for AMC last spring and summer, along with a spike in the third quarter.
AMC’s cash position will also be in the spotlight when it reports its results. “On Friday, we report [first-quarter] earnings, and will announce our sizable cash position,” Aron tweeted on Monday.
Related: AMC boosted by rebound in foot traffic and Gen Z visits, research finds
At the end of 2022, AMC had a cash position of $631.5 million, excluding restricted cash of $22.9 million.
“We expect AMC to continue raising cash with its equity while chipping away at its massive debt balance,” said Wedbush’s Reese. “AMC is likely to continue expanding with high-quality screen acquisitions as they become available from faltering competitors, while continuing to dip into various new business ventures to drive new incremental revenue streams.”
Wedbush has an underperform rating for AMC. Of eight analysts surveyed by FactSet, three have a hold rating and five have a sell rating for AMC.
AMC is expected to report a first-quarter loss of 14 cents a share, or a loss of 16 cents on an adjusted basis, and sales of $938 million, according to analysts surveyed by FactSet.
Now read: AMC set to expand its branded popcorn sales to 2,600 Walmart stores
The movie-theater chain has been on a roller-coaster ride over the past two years that took it from beleaguered pandemic victim to meme-stock phenomenon. AMC used the steep rise in its share price to tap into equity and debt markets, raising $917 million in January 2021.
AMC is looking to resolve its proposed conversion of AMC Preferred Equity
APE,
units into common stock.
In a filing on April 3, AMC announced a settlement that opens the way for the stock conversion, alongside a 10-to-1 reverse stock split and the capacity to sell more shares. The move, which is part of the company’s ongoing battle to eliminate debt, has faced court proceedings, however. A judge has denied AMC’s attempt to quickly resolve the court fight.
Related: AMC CEO slams Robinhood over alert wrongly claiming theater chain had filed for bankruptcy
At the end of 2022, AMC’s total aggregate principal debt amounted to approximately $4.95 billion, down from $5.17 billion at the end of 2021.
AMC shares rose 3.3% Wednesday, compared with the S&P 500’s
SPX,
decline of 0.6%. The APEs rose 2.3%.
