It's been a hot summer for the corner multiplex, and that's naturally welcome news for AMC Entertainment (AMC 3.16%). Exhibitors are fresh from scoring a post-pandemic weekend record, but it's easy to be concerned. There are no more Marvel movies coming out until November, and there is no obvious summer blockbuster in the pipeline to bring this turnaround season home.
Don't panic. Everything is going according to plan. AMC and its fellow theater operators will be just fine. The summer of 2022 has already been won. The multiplex chains may face challenges on Wall Street for their valuations and their stubborn debt levels as we head into a climate of rising borrowing costs, but they've already nailed the renaissance.
Let's all go to the lobby
Sometimes you have to zoom in -- not out -- to get a clearer take at the big picture. It's true that year-to-date box office receipts for stateside theaters are down 31% compared to where we were at this point in 2019. However, the 2022 results are being held back by the slow start this year as Hollywood was hesitant to push out big releases.
The third quarter itself is off to a blazing start. We're just two weeks into the period, but ticket sales are 8% ahead of where they were at this point in July of last year. In fact, you have to go all the way back to 2016 -- six years ago -- to find a hotter start through the first 14 days of July.
There's some bearish chatter about the lack of clear box office leaders for the second half of the quarter, but isn't that always the case? Studios put out their more promising summer releases between Memorial Day and mid-July. The slate historically thins out in August and September as families get back to school. Going back to 2019 -- the benchmark for all pre-pandemic comparisons -- you will find that just 2 flicks of the 28 most successful releases in that year came out in August or September.
This quarter should fare a lot better than the first half of 2022 for exhibitors, and AMC itself should fare even better. It's gradually gaining market share. More importantly, AMC is also scoring big at the high-margin concession stand. Food and beverage revenue per customer is 40% higher now than it was in 2019 -- at least through the first quarter.
Analysts don't see AMC revenue clocking in 31% lower for the third quarter than it did in 2019. Wall Street consensus is calling for a less than 13% decline, and that could prove to be conservative. The total number of tickets sold should be lower than three years ago, but with admission rates inching higher and folks making the most of mobile ordering to speed up the purchase of snacks this should be a good summer for air-conditioned movie theaters.
AMC Entertainment stock is up 55% since bottoming out two months ago. The other movie theater stocks are trading closer to their lows, but there's a growing feeling that the worse could be behind them now. The season has already been won. The balance of the literal summer is just a formality at this point.