What happened
Shares of AMC Entertainment (AMC) declined by 5.4% on Tuesday, following the release of the popular movie theater chain's first-quarter financial results.
So what
AMC's revenue surged more than fivefold year over year to $785.7 million. With coronavirus-related restrictions lifted in most markets and COVID-19 case counts moderating, people are returning to AMC's locations once again.
"When Hollywood releases films that moviegoers want to see, people flock to cinemas in huge numbers to watch movies where they were designed to be seen, in theaters, on the big screen," CEO Adam Aron said in a press release.
Image source: Getty Images.
Still, AMC was forced to take on a sizable amount of debt to stay afloat during the early stages of the pandemic, when its theaters were forced to close due to health concerns. The costs to service that debt, combined with attendance levels that have yet to fully recover to pre-pandemic levels, continue to weigh on the company's profitability.
AMC, in turn, generated a net loss of $337.4 million, though that was an improvement from the $567.2 million net loss it posted in the year-ago quarter.
"Our results for the first quarter of 2022 represent AMC's strongest first quarter in two full years," Aron said. "We continue on our pandemic recovery trajectory."
Now what
AMC's traffic rebound could gain steam in the coming months. Upcoming films such as Top Gun: Maverick, Jurassic World Dominion, Lightyear, Black Panther: Wakanda Forever, and Avatar 2 all have blockbuster potential.
"The outlook for the theatrical box office during the remainder of 2022 is very exciting," Aron said.
