Exhibition industry analysts who soured on their own Q4 domestic box office sales forecasts following a string of disappointments are eating their words this morning.
Due entirely to the mind-boggling performance of Star Wars: The Force Awakens — which generated $149 million domestically in its second weekend and $540.3 million to date — the quarter is up 9.4% vs the period last year. That has “erased all concerns” that total sales will fall short of the consensus forecast before the quarter began of +11%, says MKM Partners’ Eric Handler.
He acknowledges now that he “spoke too soon” two weeks ago — before Star Wars opened — when he said that the Q4 box office would “almost certainly” fall short of the +11% forecast, and likely “finish up in the low-to mid-single-digit range.”
He had company after several films including Spectre, Hunger Games: Mockingjay -Part 2, The Good Dinosaur, Steve Jobs, and The Night Before fell short of analysts’ expectations.
But Disney’s sci-fi action film will make up for the disappointments. Star Wars “should have no problem clearing $600 million by month end,” well ahead of his prediction for $400 million in Q4, Handler says.
With total domestic box office for 2015 poised to pass $11 billion, the “only disappointment” is that the results are so lopsided in favor of a few mega-blockbusters, Wunderlich Securities’ Matthew Harrigan says. The 10 biggest revenue generating films “constituted nearly 35% of the total vs. sub 25% in 2014.”
B. Riley & Co’s Eric Wold says that’s especially apparent in Q4 where “Star Wars single-handedly saved the fourth quarter.” The three most popular films in the period have accounted for a record 38.6% of the quarter-to-date sales vs an average over the last three years of 25.3%.
And Star Wars‘ force isn’t spent. It could generate as much as as $460 million in sales in Q1, the analyst says. “This would provide a relatively healthy 3-4% boost to 2016 annual box office trends at the start of the year (and could be missed for those solely considering films actually released in 2016).”
Still, exhibition stocks have yet to reflect the box office bonanza; investors believe that Disney will collect the lion’s share of the sales. Although Regal’s shares are up 1.1%, Carmike is down 0.4%, Cinemark is -0.2%, Imax is -1.1%, and AMC Entertainment is -1.5%.
Since December 18, when Star Wars opened, AMC is -10.2%, Imax is -9.8%, Cinemark is -5.9%, Regal is -2.5%, and Carmike is -1.2%.
Disney is up 1% today but down 6.1% since Star Wars opened — largely due to growing concerns about the prospects for ESPN.