What happened

Six Flags (SIX 0.69%) shareholders underperformed a historically weak market last month as the stock dropped 34% compared to an 8% decline in the S&P 500, according to data provided by S&P Global Market Intelligence.

The decline added to a difficult run for the theme park stock, which is down over 40% since early 2015.

A roller coaster starts down a hill.

Image source: Getty Images.

So what

Investors reacted harshly to the company's fourth-quarter earnings report, which included bad news on both the operating and financial return fronts. Attendance and per-capital guest spending fell in the period despite broadly positive economic conditions. The declines suggest Six Flags is struggling to retain its appeal in the face of other entertainment options and competing parks.

Costs are increasing, meanwhile, which adds pressure on the business to raise prices. That isn't easy to do in the context of falling attendance, though.

Now what

These challenges point to the need for Six Flag to up its game by investing heavily in upgrading the theme park experience. Management announced just such an initiative in early February, but it also slashed its dividend so that it could generate plenty of capital to direct toward that goal. Investors understandably chose to focus on the reduced dividend income over the potential of a quick operating rebound.