What happened
Shares of AMC Entertainment Holdings (AMC 3.96%) were moving higher again today. Though there was no company-specific news, shares gained yesterday in response to a strong weekend at the box office, and that trend seems to have carried the stock higher for the second day in a row today. Additionally, the July retail sales report showed spending at restaurants and bars increased from June, even as overall retail sales fell while the delta variant spread across the country.
As of 12:48 p.m. EDT on Tuesday, the stock was up 3.7% after gaining as much as 8.7% earlier in the session.
Image source: AMC Entertainment.
So what
AMC, the world's largest movie theater chain, tacked on 6.6% yesterday in response to a strong showing from Free Guy at the box office over the weekend. The sci-fi flick starring Ryan Reynolds brought in $28 million at the domestic box office over the weekend, leading a total haul of $75 million, which was up 16% from the previous weekend. That's a positive sign for the movie theater industry, especially coming when the number of coronavirus cases is increasing and many parts of the country are experiencing active outbreaks.
Separately, the Census Bureau reported that overall retail sales fell 1.1% from June to July, potentially a reflection of the impact of the delta variant, but sales at restaurants and bars were up 1.7%, which seems to show that Americans are still eager to return to nightlife. Though the Census Bureau doesn't report sales at movie theaters, an increase in restaurant sales would seem to be a good sign for the theater industry as the two are complementary.
Now what
Today marked the fourth straight day of gains for AMC as the stock has been riding a positive trend since its earnings report last week. While the results topped estimates, they still showed that the theater chain has a long way to go to get back to its pre-pandemic level of sales.
Nonetheless, the uptick in box office sales over the weekend is a positive sign, and AMC's base of meme stock investors is likely to keep shares volatile no matter what happens to the actual business.
