I wasn't at my local movie theater over the holiday weekend, and I'm guessing that you weren't, either. Domestic ticket sales clocked in at $92.3 million for the four-day holiday window, 45% lower than the industry's box-office receipts a year earlier. Based on the industry average admission price, less than 3% of the country went to a multiplex during the extended weekend.
Things were far worse a week earlier when $29.1 million in tickets were sold. Super Bowl weekend can be challenging for exhibitors, but that was the worst weekend for theater operators in nearly three years. To find it, you have to go all the way back to May of 2021, when many studios were holding back on content and patrons were hesitant to risk going to an even empty theater during the peak COVID-19 crisis.
I wouldn't bet against the players, including multiplex-operator Cinemark (CNK 0.97%) and theatrical-experience super-sizer Imax (IMAX -1.77%) in this environment. The lull should be temporary, though my tune may change under the unlikely scenario that filmgoers are still staying away from screenings later this year.
Waiting for the hero to show up
It's been a rough start to 2024. None of the dozens of movies that debuted theatrically this year have topped $72 million in domestic box-office receipts. There's a good reason for that. Motion-picture studios tend to slot their largest releases ahead of longer summer and holiday breaks to maximize the potential blockbuster impact.
A bigger reason the crop of new films has struggled relative to prior yearly starts is that the writer and actor strikes halted productions for months. Studios have been bumping releases that were initially slated to come out late last year and early this year later into the operating calendar.
Big releases will come. There's no shortage of springtime and summer releases that can bring customers back to the colorful concession stands and sticky floors of your neighborhood cinema.
Investors aren't breaking a sweat right now. Cinemark stock has nearly doubled since the start of last year and returned to annual profitability in 2023. It's the rare market winner in this space, largely because it didn't have to resort to leverage or dilution to get through the initial pandemic lull. Its share count is only marginally ahead of where it was in 2019 and its long-term debt is reasonably higher.
Imax hasn't fared as well as Cinemark. It's trading only slightly higher than where it was at the end of 2022, but it's another industry specialist that returned to positive net income in 2023.
A lot is riding on a strong slate in the coming months. You won't have to wait long. New installments in the Dune, Kung Fu Panda, Ghostbusters, and Godzilla franchises are coming out in March. Disney (DIS -0.04%) alone should recover nicely from a disappointing 2023, as it has several potential blockbusters from its Planet of the Apes, Inside Out, Deadpool, Alien, Moana, and The Lion King properties coming out between May and December.
This should be music to Imax investors' ears. The company needs a healthy slate of big-budget releases to justify customers shelling out for a premium viewing experience.
Image source: Getty Images.
Where the concessions stand
Don't forget about what happened last summer when Barbie and Oppenheimer opened at the same time. Stateside theaters sold $302 million in tickets that late July weekend -- the industry's best performance in more than four years.
It wasn't enough to get consistently back to pre-pandemic crowds, though. The $8.9 billion in domestic box-office receipts generated last year was the industry's best showing since 2019, but you have to go all the way back to 2005 to find a year before the COVID-19 crisis with lower ticket sales. Oh, and that's without adjusting admissions for inflation.
Cinemark should still be fine. It's no longer just about the ticket stub. Theater chains have gotten better about ramping up their concession-stand offerings.
It's not just about upgrading food options or rolling out better film-specific merch. Exhibitors have embraced digital tech tools to drive advance mobile orders of snacks and beverages, as well as stickier loyalty programs to keep fans close.
You probably don't want to buy all movie-theater stocks, but Cinemark and Imax have earned the market's trust with improving operations and income statements that faded to black and out of the red in 2023. It's been a rough two months to kick off 2024, but the feature presentations are finally on the way.
