Cinema Industry Shows Mixed Results in Early 2024 Amid Strike Fallout and Strong Premium Offerings

By J. Sperling Reich | May 5, 2024 1:58 pm PDT
Exhibitor Earnings Reports - 2024 First Quarter

In case you haven’t been listening to motion picture exhibition senior executives and industry pundits for the past six months, the first quarter of 2024 was forecast to be a complete wash. With the 2023 Hollywood writers and actors strikes resulting in a dearth of blockbusters in a thin release schedule, cinema operators were expecting a precipitous decline in box office, overall attendance and ultimately revenue. The success of “Avatar: The Way of Water” during the first quarter of 2023 wasn’t going to help year-over-year comparisons.

Despite facing such ongoing challenges, include studios continuing to habituate moviegoers to streaming services, the cinema industry demonstrated resilience in the first quarter of 2024, with mixed results among major exhibition companies. At least the ones who are public and must report their financials on a regular basis. While some companies reported lower revenue and attendance, others experienced a notable rebound, indicating a complex yet hopeful landscape. All of these exhibitors referenced a promising slate of films ahead and a focus on enhancing the theater experience for the remainder of 2024.

Though we’re still waiting for a few public cinema operators like PVR INOX and Reading International to report earnings for the time period here’s a rundown of a few that already have.

AMC Theatres
AMC, the largest cinema chain in the United States and biggest operator in the world, released preliminary results for the quarter ending 31 March 2024 in advance of their earnings call on 8 May. The company expects total revenues to be approximately USD $951.4 million, slightly down from USD $954.4 million for the same period in 2023. Despite this, AMC managed to reduce its net loss to USD $163.5 million from USD $235.5 million in the previous year.

Adjusted EBITDA fell to a loss of USD $31.6 million compared to USD $7.1 million for the previous year, primarily due to a USD $16.7 million benefit in Q1 2023 from an early lease termination. CEO Adam Aron noted that while the box office was impacted by the strikes, AMC outperformed consensus estimates for revenue, adjusted EBITDA, net income, and diluted EPS. In a statement Aron said, “While we anticipate that the second quarter box office will continue to be affected by the 2023 Hollywood strikes, we are ebullient about the upcoming film slate, and we expect to see an increasingly strong box office as the year progresses.”

Cinemark, the third largest operator in the US with multiplexes throughout Latin America, reported total revenue of USD $579.2 million for the first quarter, a 5.2% decrease from the same period in 2023. The company also experienced a decline in admissions revenue, concessions revenue and attendance. However, Cinemark’s President and CEO, Sean Gamble, highlighted that the company entertained 40 million moviegoers and delivered domestic box office results that surpassed North American industry recovery relative to Q1 2019 by over 700 basis points. For those keeping score at home, that would be 7%.

Despite the decline in revenue, Cinemark achieved a net income of USD $24.8 million compared to a loss of USD $3.1 million in the previous year. Cinemark maintained a healthy balance sheet with USD $789 million in cash and repaid USD $150 million of its Covid-related debt.

She if you catch the subtle reference to premium cinematic experiences in Gable’s earnings announcement statement, “Outsized results across a wide array of diverse films provide further validation that consumer enthusiasm for experiencing compelling content in an elevated, cinematic, theatrical setting remains robust.”

Marcus Theatres
The theatre subsidiary of the Wisconsin-based Marcus Corporation also reported a weaker first quarter due to the strike-induced production delays. The company recorded total revenue of USD $81.3 million, down from USD $96.4 million in the previous year, reflecting the impact of fewer blockbuster releases. This resulted in an operating loss of USD $5.7 million in the first quarter of fiscal 2024 and Adjusted EBITDA of USD $6.2 million.

The company’s CEO, Gregory S. Marcus, expressed optimism in reporting Q1 earnings, expecting improvements in the film slate and theater performance in the coming months.

IMAX Corporation
IMAX, the 800-pound gorilla of premium large-format screens, reported a strong first quarter with global box office revenue of USD $261 million, making it the third-highest grossing Q1 in the company’s history. The company’s net income reached USD $3.3 million, up 33% year-over-year. IMAX CEO Rich Gelfond attributed this success to blockbuster films such as “Dune: Part Two” and “Godzilla x Kong: New Empire,” as well as a broader content portfolio, including IMAX-exclusive events and local language releases.

IMAX accounted for 3.4% of global box office during the term and 5.9% of domestic box office, its highest quarterly market share in North America. The company has also been strategically expanding its platform, with more films shot using IMAX cameras and a robust slate of upcoming releases. They network of IMAX auditoriums is slated to grow 21%, currently standing at 1,697 screens with a backlog of 442 installations waiting.

Kinepolis Group
Kinepolis, a leading European cinema chain with locations in Canada, reported lower revenue in Q1 2024 due to decreased visitor numbers, and like every other exhibitor on the planet, faulted a weaker film offering compared to 2023 as the reason. The company recorded a 9.6% decrease in visitors, with total revenue also lower. Despite this, Kinepolis maintained strong sales per visitor, driven by demand for premium offerings.

Kinepolis CEO Eddy Duquenne noted that while the first quarter had a limited number of major film releases as the studios absorbed the impact of last year’s strikes, the top films performed strongly. “While Hollywood is working to restore the film offering, we remain committed to our premiumization strategy. The recent blockbusters again showed strong results in this regard,” he said. This was demonstrated in the company’s investments in premium movie experiences like ScreenX and Lasdr ULTRA as well as new theater openings across Europe and North America.

J. Sperling Reich