AMC Entertainment’s stock perked up Thursday after the top exhibitor announced second-quarter results that exceeded Wall Street’s expectations thanks to Avengers: Endgame and other blockbusters.
Net income totaled $49.4 million, more than double the $22.2 million recorded in the year-earlier period. On a per-share basis, earnings were 17 cents, equal to the year-ago period. Wall Street analysts’ consensus was for 14 cents a share. Total revenue increased 4% to $1.5 billion, ahead of forecasts.
Shares in AMC, which slumped to a multi-year low of $8.73 in July, rallied on the earnings news. At mid-day Thursday, they were trading at $11.86, up 4.5%.
Endgame and other films released in April, May and June drove 97 million ticket sales in the quarter, a company record. The company’s AMC Stubs loyalty program now reaches 21 million member households, the company said, and the Stubs A-List subscription program has 900,000 subscribers.
Going beyond the subscription model, which unto itself represents a step change for exhibitors’ strategy, AMC CEO Adam Aron said the circuit is testing dynamic pricing, which would mean pricier tickets for certain blockbusters. During a conference call with Wall Street analysts to discuss the quarterly numbers, Aron said a pilot program at 30 theaters is under way in four cities. In those sites, which started the test last week, is implementing surcharges of 50 cents, $1 and $1.50 for each ticket bought for a handful of top titles.
Dynamic pricing has been bandied about by several U.S. exhibitors and is used in many international territories, but AMC’s pilot program represents a first. “These pricing strategies have been commonplace across our European theaters for years,” Aron said, also noting the ubiquity of dynamic pricing in the airline and hotel sectors. “Industry observers have talked about this idea coming to the United States also for years. Moving from mere talk at AMC, we’re trying it right right now, in the United States, to determine the consumer response.”
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