We're at the point in the telltale summer season where the obvious blockbusters have already hit the silver screen. The $132.7 million in domestic ticket sales for multiplex operators over the past weekend is the weakest showing since early June. After back-to-back weeks of post-pandemic weekend records, things appear to have slowed since peaking with the $238.3 million collected at the box office a weekend earlier.
It's OK to celebrate. It's OK to not fear that the party is over. The industry showed us what it can do when it has a healthy pipeline of content. We didn't lose our appetite for a theater outing just because streaming services catapulted in popularity during the first two years of the COVID-19 crisis. AMC Entertainment (AMC 5.99%), Cinemark (CNK), and Imax (IMAX 0.29%) could be just getting started.
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Screen test
It's easy to look at the next few weeks of theatrical releases and be underwhelmed. This is by design, as studios put out their biggest summertime releases between Memorial Day and mid-July. Summer may technically end Sept. 22, but exhibitors know that it really ends through August as schools start up again after the seasonal break.
We are simply at the point where one can watch for potential sleeper hits. Is there a potential debutante winner this weekend? Nope. That wasn't a negative response. Nope has the potential to surprise audiences. Jordan Peele has already turned heads with his two previous horror films that pack a social commentary punch. Get Out in 2017 and Us two years later topped $175 million in stateside ticket sales apiece. The two films also had long tails, continuing to draw audiences weeks into the run. This is a pretty important right now with the seasonally sleepy slate of premieres we typically have in August and September.
The industry stocks are already big winners this summer. Market leader AMC is up a blistering 71% since bottoming out in mid-May, two weeks before Top Gun: Maverick made it clear that the multiplex was back. Smaller exhibitor Cinemark and experience enhancer Imax are up a more modest 24% and 20%, respectively, off their recent lows, but it's clear that sentiment has turned. As I pointed out five weeks ago, it's time for serious investors to approach movie theater stocks with more optimistic eyes.
There may not be another Jurassic World, Minions, or Marvel franchise entry this summer, but the industry has popped out of the shallow grave that worrywarts were shoveling dirt over the past couple of years. Folks still crave big-screen experiences in crowded theaters for certain cinematic experiences, and the players in this market have only made their product better during the pandemic lull. AMC has led the way with mobile ordering of concessions, reserved seating, and lobby upgrades. Ticket prices and spending per guest are on the rise.
The future is bright for movie theater stocks, even now when crowds are expected to thin out during historically sleepy second half of the season. Is it time to throw in the towel after big gains in recent weeks just because box office receipts will predictably taper off now? Nope.
