There’s been much to celebrate for movie fans recently, The box office is basking in the post-Barbenheimer glow, and yesterday’s National Cinema Day only added to festivities, as more than 3,000 theaters across the US — nearly 75% of the nation’s cinemas — offered tickets for as little as $4. For the country’s largest cinema chain, however, the mood hasn't been as joyous.
Popcorn profits
Shares in AMC Theatres fell ~14% in value on Friday as the company’s preferred equity units converted into common stock — freeing up the company to sell more shares to new investors in future. The recent slide compounds what has been a miserable year for the company. AMC has now shed 64% of its market value in 2023 and shares in the company are down 97% since June 2021, when the chain found itself at the center of meme-stock mania.
AMC operates more than 900 theaters, but even at that scale profits aren’t coming easily, as the chain booked a $23m operating loss for the first six months of 2023, which might be hard to fathom for anyone used to buying popcorn or other food and drinks at the cinema. Indeed, the company raked in more than $817m in food and drink sales, reporting costs of just $153m associated with that revenue — a whopping 81% margin. Unfortunately, that margin vanished pretty quickly, as rent and other operating expenses tallied more than $2bn — a precarious position for a company with more than $9bn of debt hanging over it.
