What happened

Movie theater operator AMC Entertainment Holdings (AMC 0.77%) is beating a rising market this week by booking gains of roughly 8% through trading on Thursday.

The boost added to massive short-term returns for shareholders in the popular meme stock. But the lift was grounded in news about concrete improvements in its business.

A man eats popcorn while watching a movie in a theater.

Image source: Getty Images.

So what

Over the weekend, the company announced that October marked a return to ticket-sales levels not seen since the pandemic began affecting the industry in early 2020. The release of the popular film Dune helped spark a recovery in the theater business as COVID-19 case rates declined in many markets.

AMC stock likely also benefited from growing interest in peer meme stocks such as Bed Bath & Beyond, which soared higher this week.

Now what

Investors should brace for more volatility for AMC stock. The company is set to announce third-quarter earnings results after the market closes on Monday, Nov. 8.

That report will add context to the sales rebound that gained momentum in October and likely extended into early November. AMC might have good news to report on the earnings front, too. But given the stock's huge gains so far in 2021, there's a high bar for the company to meet if it wants to continue thrilling Wall Street.

As a result, investors will want to be careful about buying this stock, which is in a highly competitive industry that faces structural growth pressures. That environment makes it difficult for even leading companies like AMC to produce sustainably rising earnings over time.