The calendar tells us that we’re less than halfway through the summer, but the season is pretty much already in the books for multiplex operators. Movie studios tend to lay low through August and September, knowing that school-aged audiences peak between Memorial Day and Independence Day.
It’s fair to say that the peak summer season was a success for AMC Entertainment (NYSE: AMC) and its fellow exhibitors. This past weekend may have resulted in less than $124 million in domestic ticket sales — the softest showing since the first weekend of June — but it was still a notable success. Director Jordan Peele’s Nope collected $44 million at the box office in its debut weekend. Superhero films, reboots, and sequels may have opened stronger since the pandemic began, but Nope had the biggest opening-weekend haul for a film based on original intellectual property since Peele’s previous theatrical release, 2019’s Us.
It’s not a bad miracle
AMC knew that Nope could be a potential sleeper hit late in the summer vacation season. Its chain of in-theater McGuffins bars even rolled out a Bad Miracle specialty cocktail themed to the horror film. Peele has fared well with his two earlier films, and they generate enough positive word-of-mouth to keep patrons coming for weeks to check out the cinematic spectacle. Long tails matter for movies, especially these days with shortened exclusivity windows at the local multiplex.
Theaters have generated $965.4 million in ticket sales this month, 7% shy of their total at this point in 2019. That’s also 14% below 2011’s peak of $1.12 billion. Pessimists about the movie industry would point out that tickets cost a lot less back then, and they’d be right. Folks paid an average of $7.93 per admission in 2011; it’s north of $9 now. Inflation does reframe the milestones, but even so, it’s clear that consumers are not abandoning the movie theater experience.
The number of tickets sold may be far from the industry peak reached two decades ago, but theater chains are getting better at monetizing their audiences. I’m not talking about cramming more ads into the pre-flick previews. I’m talking concessions. AMC reported earlier this year that its consolidated food and beverage sales per customer are 40% higher now than they were in 2019. We should get an update on that metric when AMC reports its second-quarter results next week.
AMC upgraded its chain during the pandemic lull so that most of its theaters can now accept mobile orders. It also shifted most of its locations to work on reserved seating, a move that encourages people to buy tickets early to square away the best views.
The absolute weekend returns may keep contracting in the coming weeks, but this summer is already a certified hit. July had back-to-back weeks of post-pandemic weekend records for domestic screens. AMC and its peers have also improved their average revenues per patron, so the chains are faring better on more than just ticket sales, which go largely to the studios.
You no longer want to bet against movie theater stocks. AMC stock has soared 60% since bottoming out in May. There will be some slow weekends ahead at the movie house, and AMC will be challenged on its path to profitability in this climate of rising interest rates. It’s still not a bad miracle for the industry. Film fans are back, and they’re shelling out more money at the multiplex.