In the third quarter, analysts expect AMC Entertainment’s (AMC) revenue to increase 3.7% to $1.22 billion, which is in stark contrast to revenue growth of 51.2% reported in the same quarter last year. AMC Entertainment has already stated that the third quarter could be challenging.
The company has also added that the fourth quarter could be strong, which might be due to the release of some highly anticipated movies over the holiday season like Fantastic Beasts: The Crimes of Grindelwald, Aquaman, and Bumblebee.
In the second quarter of 2018, AMC’s revenue of $1.443 billion came in marginally better than analysts’ consensus estimates of $1.435 billion and grew by 20% on a year-over-year basis. A strong summer box office performance was the primary growth driver. Due to a strong financial performance during the first and second quarter of 2018, AMC Entertainment stock has risen ~24% on a year-to-date basis as of October 29.
Apart from stellar box office hits, the additions of recliners and large-format screens are contributing to the company’s top-line growth. Tickets for large-format screens carry a premium versus normal tickets.
Also, AMC Entertainment is upbeat about its loyalty program in the US. As of October 5, AMC Stubs A-List had 400,000 paid members within just 14 weeks of its launch. A-list was added to the AMC Premiere tier for $19.95 and was launched to contain the threat from MoviePass.
AMC members can watch any movie at any location in any format. In contrast, MoviePass only offers access to 2D format. AMC Stubs A-List allows three movies each week and allows advanced/last-minute booking. However, AMC will still need to be watchful, as several theater chain owners are now offering subscription services.
Estimates for Cinemark’s top line
Meanwhile, analysts expect Cinemark Holdings’ (CNK) revenue to rise 2.9% YoY to $731.2 million in the third quarter, an improvement when compared to the third quarter of 2017 when revenue fell 7.5%.