Cinemark Holdings Inc. is basking in the success of summer blockbusters “Barbie” and “Oppenheimer,” which helped the movie theater chain deliver third-quarter earnings that blew past analysts’ estimates Friday.
The two movies even sparked an internet phenomenon dubbed “Barbenheimer,” with people watching both films on the same day. Set against this backdrop, Cinemark’s
third-quarter results were boosted by a jump in admissions, including a record domestic box office in July.
Speaking during a conference call to discuss the results, Gamble highlighted the impact of “Barbie,” “Oppenheimer,” faith-based hit “Sound of Freedom,” as well as new installments from action-adventure franchises such as “Mission Impossible,” “Indiana Jones,” “Teenage Mutant Ninja Turtles,” and “The Meg.” The CEO also pointed to suspense horror sequels such as “Insidious: The Red Door” and “The Nun II,” which all accumulated significant results during the quarter. “The third quarter epitomized the positive appeal and impact of a diverse slate of films,” he said.
The consumer enthusiasm that Cinemark saw during the third quarter is continuing into the fourth quarter, according to Gamble. “Gen-Z came together in droves this past weekend, in many cases, dressed up as their favorite characters, to experience ‘Five nights at Freddy’s’ on the big screen,” he said, and cited the record-breaking “Taylor Swift: The Eras Tour,” which hit theaters last month and is now the largest concert film of all time.
The CEO also addressed new film release volumes, explaining that last year, new releases recovered to approximately 65% of pre-pandemic levels, and are tracking to approximately 80% this year. Growing film production momentum at the start of the year also had 2024 new film release volume on pace to recover even further, according to Gamble. “However, the writers and actors strikes in Hollywood over the past six months have caused a temporary disruption to that recovery trajectory, and updated expectations for 2024 are still evolving,” he added. “That said, the writers concluded negotiations with the studios and have been back at work for the past month and we’re hopeful the actors and studios will follow suit soon.”
Gamble also cited positive longer-term indicators. “Our traditional studio partners continue to reinforce their intentions of rebuilding annual theatrical film output to pre-pandemic levels over the next two to three years, and we have received no indication that those plans have been altered by the strikes,” he said. The CEO also pointed to Amazon.com Inc.
and Apple Inc.
“stepping up their theatrical ambitions.”
In a statement released Friday Cinemark said that its box office recovery “continued to surpass industry results.” Cinemark “remained the only major U.S. exhibitor to have achieved a meaningful increase in market share since the pandemic,” the company added.
Cinemark swung to net income of $90.2 million, or 61 cents a share, from a loss of $24.5 million, or 20 cents a share, in the year-ago period. The FactSet consensus for earnings per share was 41 cents. Revenue grew 34.5% to $874.8 million, above the FactSet consensus of $845.6 million, as admissions revenue jumped 36.7% to $443.8 million and concession revenue increased 34.0% to $339.8 million.
Admission rose 27.9% to 61.9 million guests, and the average ticket price increased 6.9% to $7.17. “As we assess the fundamental drivers of our industry’s and company’s long-term health and prosperity — particularly consumer behavior trends, key indicators for new release volume recovery over time, and the significant range of incremental revenue and productivity opportunities that are fully within our control — we remain highly optimistic about the future,” Cinemark CEO Sean Gamble, said in the statement.
Shares of Cinemark are up 92.8% in 2023, outpacing the S&P 500 index’s gain of 13.7%.