AMC’s Sales Surge as Moviegoers Return to Theaters

AMC Entertainment Holdings has recently reported impressive earnings, signaling a potential shift away from its meme stock status. The company, famously associated with the retail trader movement on Reddit, has seen its fortunes fluctuate over the past two years. Back in January 2020, AMC’s short interest as a percentage of its float stood at a staggering 56.8%, according to Dow Jones Market Data.

At the height of the meme stock frenzy, AMC’s shares soared to $34.83 in 2021, only to subsequently experience a significant drop, currently trading around $5 per share. The challenges faced by AMC have been twofold – the lingering effects of pandemic-related restrictions on moviegoers and intense competition from streaming platforms. However, there are signs of a potential turnaround.

Investors have been closely monitoring AMC’s ability to revive theater attendance and convert its APE preferred shares into common shares to raise equity. Encouragingly, AMC’s second-quarter performance exceeded expectations, surprising Wall Street with a per-share profit, year-over-year revenue growth, and its most robust quarterly attendance since 2019.

According to Wedbush analyst Alicia Reese, the strong Q2 performance was driven by the outperformance of a few titles, notably “Super Mario Bros.” This resulted in a 15% year-over-year increase in domestic box office figures. Furthermore, concession sales played a crucial role in boosting revenue, with AMC reporting an average food and beverage revenue of $7.36 per patron – a notable increase from last year’s $6.71 and nearly reaching the company’s record high.

Overall, AMC Entertainment Holdings seems to be leaving its meme stock past behind as it focuses on delivering a brighter future. With encouraging earnings and promising signs of recovery in the movie theater industry, AMC may be on the path to regaining its former glory.

Title: AMC’s Sales Surge as Moviegoers Return to Theaters

“Management Explores Expansion of Food, Beverage, and Alcohol Sales”

Barrington Research analyst, James Goss, indicates that AMC Entertainment Holdings has shown a keen interest in diversifying its food and beverage offerings while also capitalizing on the potential of alcohol sales in areas where it was previously restricted. This strategic move aims to leverage the current momentum in concessions revenue.

In July, AMC experienced an unprecedented boost in revenue, thanks to the resounding success of blockbuster hits such as Barbie and Oppenheimer. These movies played a significant role in propelling AMC to its highest monthly revenue figure ever recorded.

Analyst Eric Wold from B. Riley notes that AMC’s box office revenues per screen have recovered remarkably, reaching approximately 93% of the levels witnessed in the second quarter of 2019. In contrast, the industry as a whole has only managed to achieve around 82% of the same benchmark. Wold attributes this positive shift to moviegoers’ preference for large-format and premium cinema experiences. Furthermore, he emphasizes that dominant theater circuits have a golden opportunity to capture and maintain market share.

While AMC’s sales performance is promising, certain risks loom on the horizon. Potential strikes by Hollywood writers and actors pose a threat to the future prospects of the business. Additionally, ongoing legal proceedings related to the conversion of APE shares into common stock remain a point of concern.

Reese, an industry expert, cautions shareholders about the implications of failing to convert APE shares. She highlights the need for AMC to issue a substantial amount of APE shares to meet its upcoming cash requirements if conversion is hindered. Consequently, this could significantly dilute the company’s overall outstanding share count. Reese rates the stock as Underperform and sets a $2 price target.

Overall, if moviegoers continue flocking to theaters and AMC successfully converts its APE shares, the market sentiment towards its stock may shift away from perceiving it as a risky meme stock.