Six Flags and Cedar Fair have merged

The deal creates a theme park behemoth, which is seeking to improve its core economics as it manages more than $4 billion in net debt

William Coulman, David Crowther

7/5/24 2:04AM

Rollercoaster tycoon

This week, the merger of theme park operators Six Flags and Cedar Fair was completed, creating a new giant in the industry, with annual revenues north of $3 billion, that spans 27 amusement parks and 15 water parks. Calling itself the “Six Flags Entertainment Corporation”, the combined entity, which is trading under Cedar Fair's ticker, FUN, will likely see close to 50 million people roll through its regional parks this year (last year would have seen 48 million).

Even at its combined scale, FUN won’t threaten the dominance of Disney or Universal, which continue to dominate the top spots for attendance. But, by joining forces, the company will be looking for that which consultants and investment bankers often promise in such deals: the rewards of greater scale.

In this case that’s important because the new company is set to be saddled with more than $4 billion of net debt. So, despite all the corporate jargon of offering “a more engaging and immersive guest experience”, a primary focus of the merger will be managing that debt load… which means getting more out of each guest.

In 2023, Six Flags (the standalone company) filings revealed that an average guest was worth about ~$61 in revenue to the park, ~$33 from admission and another ~$28 for theme park necessities like nachos, dirty fries, funnel cakes, merchandise, and extras like fast-passes. Six Flags also generated an extra ~$3 per guest through sponsorships and international agreements, helping take its operating profit margins to about 20%, or ~$13 in our example.

After the merger, however, the company believes it can make more. Indeed, an investor presentation reveals that FUN is hoping to realize significant synergies — every consultant's favorite word — from the deal. Some $120M a year is expected to be saved in costs, and an additional $80M of incremental profits (EBITDA) due to an “improved guest experience” are expected to be realized within 3 years of the deal’s close.

Nia Warfield4h

Starbucks issues apology after viral “Bearista” cup meltdown

Holiday cheer turned into chaos this week for Starbucks after the coffee giant’s new “Bearista” holiday cup sent fans into a frenzy.

Dropped alongside its 2025 holiday menu, the $30 beanie-wearing glass bear tumbler sparked long lines, sellouts, and even in-store scuffles before Starbucks stepped in with an apology.

“The excitement for our merchandise exceeded even our biggest expectations,” the company said in a statement to People. “Despite shipping more Bearista cups to our coffeehouses than almost any other item this holiday season, the Bearista cup and some other items sold out fast.”

Within hours of launch, frustrated fans flooded Starbucks’ social media pages and even store hotlines. Some customers waited in line before dawn and others said their stores received only a handful of cups. In one Houston location, the craze even turned physical, with police reportedly called to break up a brawl. Meanwhile, the cup is already reselling on sites like eBay, with listings topping $600.

“We understand many customers were excited about the Bearista cup and apologize for the disappointment this may have caused,” Starbucks said. While in-store customers may be upset, investors seem happy about the viral hit, as the stock has risen over 3% on Friday.

If you’re still hoping for a Bearista at market price, that may not be on order: the chain didn’t disclose how many cups were made or whether a restock is planned.

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Target tells workers to smile, wave, and greet shoppers if they come within 10 feet of them

Target just rolled out a new rule for store employees: “smile, make eye contact, and greet or wave” when a shopper comes within 10 feet — and if they get closer, within four feet, “ask whether they need help or how their day is going,” according to a new Bloomberg report.

Dubbed the “10-4 program” internally, the rule mirrors rival Walmart’s own 10-foot policy, formalizing behavior Target had previously only encouraged.

Target Mandates Worker Smiles, Friendliness to Boost Sales

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Monster surges on energy drink buzz, while Celsius sinks on distribution concerns

Shares of Monster Beverage climbed 5% after the bell on Thursday, and held most of those gains into early trading on Friday, following strong Q3 results.

The energy drink giant topped market expectations, with quarterly sales up 17% year over year to $2.2 billion and adjusted net profits growing 41% to $524.5 million — 11% ahead of Wall Street’s estimates. In the report, Monster highlighted its zero-sugar line and new product launches, with a stack of novel flavors already released this year, as bright spots.

During a call with analysts, Chief Executive Hilton Schlosberg said that the global energy drink category “remains healthy with robust growth,” The Wall Street Journal reported, adding that demand for more affordable caffeinated drinks is rising as coffee has become “really expensive.”

Meanwhile, rival beverage business Celsius saw shares fall as much as 23% on its Q3 results yesterday — despite beating expectations, with revenue jumping 173% — largely due to concerns about a change in the company’s distribution channel, as its newly acquired Alani Nu brand joins the PepsiCo distribution network.

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