With the theatrical debut of a third potential blockbuster this past weekend, it's easy to see why AMC Entertainment Holdings (AMC +1.38%) was looking good to even a skeptical investor like me. Yet Walt Disney's (DIS +0.63%) Lightyear -- the origin story of a lead character in Pixar's genre-defying Toy Story franchise -- failed to take flight the same way as its titular space ranger.
Lightyear took in just $50.6 million in domestic ticket sales over the weekend, well below industry forecasts for $70 million at the box office. It's also less than half of $120.9 million that Toy Story 4 collected in its opening weekend three summers ago. It's too early to call the film a flop, despite what social critics of "woke" Disney may be saying. It's also premature to call this an early end to what should be a strong summer for AMC and its multiplex-operating peers.
NYSE: AMC
Key Data Points
We're not aiming for the truck
Summer technically starts this week, but for exhibitors the season began four weekends ago when Top Gun: Maverick wowed audiences with record-breaking box office receipts for the Memorial Day holiday weekend. Two weeks later it was Jurassic World: Dominion roaring to life. Lightyear should've been the third strong debutante, but it missed the mark.
It wasn't the top draw over the weekend, as that honor went to the Jurassic World sequel. By Sunday it had already slipped to third in daily takes, watching the seemingly ageless Top Gun: Maverick defiantly fly by it as if it were a rattling control tower. This is actually good news for AMC, but let's tackle Disney first.
Lightyear's opening was a disappointment. You can't blame it on families not coming out to the movies to catch animated fare. Sonic the Hedgehog 2 opened to $72.1 million back in April. Critics of Disney can point to controversies surround a same-sex kiss in the film as well as the replacement of Tim Allen in favor of Chris Evans to voice the titular character, but it's not as if Hollywood embracing inclusion and diversity in its films has nipped viewer appetite for films. People are consuming more content than ever now between theater screenings and streaming services.
The biggest culprit could be official reviews. We saw 76% of critics recommend the film, according to reviews aggregator Rotten Tomatoes. This might seem like a solid score, but the four previous Toy Story films won over at least 97% of the critique nods. You may also want to wait a few weeks before calling Lightyear a dud. Toy Story films have had long tails in their theatrical runs before.
The sluggish debut for Lightyear also shouldn't get in the way of AMC's recovery. The spigot of content is flowing right now. At least three movies topped $44 million in domestic ticket sales this past weekend, something that hasn't happened in years. There's no stopping the pipeline now.
Elvis takes center stage this weekend. Minions: The Rise of Gru follows next weekend. Disney should bounce back the week after that with the premiere of Marvel's Thor: Love and Thunder. There is no reason to walk out early in the screening of what promises to be a huge summer for movie theater stocks. Disney will be back. AMC is already bouncing back.
