Cinemark Holdings Inc.’s stock moved between gains and losses on Friday after the cinema operator’s wider-than-expected fourth-quarter loss weighed against a revenue beat.
Plano, Texas-based Cinemark
CNK,
had a net loss of $18 million, or 15 cents a share, for the quarter, after a loss of $99.3 million, or 82 cents a share, in the year-earlier period. Revenue rose 6.5% to $638.9 million.
The FactSet consensus was for a loss of 7 cents and revenue of $620 million.
Cinemark ended the quarter with 5,719 screens across the U.S. and commitments to open five new theaters and add 43 screens over the next two years.
Chief Executive Sean Gamble said the company expects to benefit from the continued recovery in the industry after the slump it suffered during the pandemic.
“We continue to effectively navigate the fluid dynamics of our industry’s ongoing recovery, putting an emphasis on near-term revenue and margin generation, strengthening our balance sheet and actively maneuvering through varied fluctuations in film release volume, as well as inflationary cost pressures,” Gamble told analysts on the company’s earnings call, according to a FactSet transcript.
In 2023, box office was buoyed by the “Barbenheimer” phenomenon in which many moviegoers saw the blockbusters “Barbie” and “Oppenheimer” on the same day following their release last summer.
Read now: ‘Barbie’ was the rare original-film summer blockbuster. It will not reverse the franchise flood.
That momentum drove “Barbie” to gross more than $1 billion by August, making director Greta Gerwig the first female director to helm a movie that reached that milestone.
Overall North America box office grew to $9.1 billion in 2023 as other blockbusters, including “Super Mario Brothers,” “Spider-Man: Across the Spiderverse” and “Guardians of the Galaxy 3” also joined the mix, Gamble said.
There was further support from the success of Taylor Swift’s Eras Tour concert movie and from the roughly $500 million in domestic box office garnered by Apple Inc.
AAPL,
and Amazon.com Inc.
AMZN,
which are both still in the early stages of their theatrical-distribution expansion, he said.
Cinemark saw more than 40 million moviegoers at its theaters in the quarter and 210 million for all of 2023.
See also: AMC shares hit longest winning streak since December
The company also saw record-high per capita food and beverage sales of $4.68 for the year and concession revenue that exceeded 2019’s by 3%, on attendance that was 25% lower.
Admissions revenue rose 5.8% to $322.4 million in the quarter, while concession revenue rose 7.7% to $243 million.
The company improved its balance sheet by generating free cash flow of $295 million for the year, to end with net cash generation of $175 million after paying down $100 million of pandemic-related debt, Gamble said.
Membership in company’s loyalty program increased by nearly 20% in the U.S. and by more than 45% in Latin America.
Some of the perks Cinemark has added to enhance the moviegoing experience are proving popular, Gamble said. Reclining seats, for example, remained a significant driver of box-office outperformance.
The company grew its D-Box motion seat footprint by 16%, sending D-Box admissions revenue up 87% compared with 2019. D-Box seats are engineered with two extra features — a set of speakers that enhance sound and motion actuators that make an action film feel like an amusement-park ride.
Looking to 2024, the six months of work stoppage caused by the Hollywood writers and actors strikes last year is expected to reduce wide releases to about 95 titles, or 75% of prepandemic levels.
But Cinemark is expecting film volume to “spring back to the recovery glide path” in 2025 that it has been on for the last two years, Gamble said.
The stock has gained 41% over the last 12 months, while the S&P 500
SPX,
has gained 23%.
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