Shares of theme park operator Seaworld Entertainment Inc (NYSE:SEAS) fell 15.5% in August, according to data provided by S&P Global Market Intelligence, as investors fretted over a concerning quarterly report.
Second quarter revenue dropped 5.2% to $371.1 million, though net income more than tripled to $17.8 million, or $0.21 per share. But the real alarm came from a nearly half-a-million-person decline, with only 5.98 million visitors in the quarter.
Management said that a decline in Florida's parks in general was the main driver of the drop, due to a decline in Latin American and local attendance. Outside of Florida, visitation increased 67,000 in the first half of the year.
The attendance drop led management to lower EBITDA guidance from a range of between $355 million and $365 million to a new range of $310 million to $340 million.
Attendance has been a big concern for Seaworld since the Blackfish documentary was released, and right now the trends aren't heading in a positive direction. But this time it looks more like economic trends that are keeping customers away rather than sentiment about the company's properties. Until attendance picks up, I wouldn't get too bullish on shares -- cost cutting can only go so far when fewer customers are entering a company's resorts each quarter.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.