AMC Entertainment Holdings Inc. saw its stock decline by 4.7% on Wednesday after the movie-theater chain, known as the original meme stock, reported continued challenges in its second-quarter guidance due to the Hollywood actors and writers strikes.
The company revised its guidance for the quarter, anticipating a net loss of $32.8 million, or 10 cents per share, contrasting with net earnings of $8.6 million, or 6 cents per share, in the same quarter last year. FactSet analysts had expected a larger loss of 47 cents per share.
AMC projects second-quarter revenue to be $1.03 billion, down from $1.35 billion in the same period last year. Analysts surveyed by FactSet also predicted revenue of $1.03 billion.
“As we accurately predicted and previously disclosed, the prolonged actors and writers strikes of 2023 severely reduced the number of movies being released theatrically in the early months of 2024,” stated AMC CEO Adam Aron. “This explains the weakness in our preliminary Q2 2024 results, as contrasted with the same quarter of a year ago.”
Despite these challenges, Aron noted positive developments during the quarter. “AMC enjoyed a significant increase in our daily revenues in June of 2024 compared with those of April and May 2024,” he said. “Indeed, the industry box office for June was only 1.4% less than that of April and May combined.”
The company ended the quarter with cash and cash equivalents of approximately $770.3 million.
Earlier in the week, AMC announced a debt restructuring that extends up to $2.45 billion of debt maturities to 2029 and beyond, alleviating a refinancing cliff of about $2.9 billion in 2026. Aron described this restructuring as a “major milestone” for AMC, emphasizing it as a “strong vote of confidence” from lenders in the company’s future and providing the financial flexibility needed to take advantage of a projected industry recovery.
AMC is scheduled to report its second-quarter results after market close on August 2. The stock has decreased by 21.9% year to date, while the S&P 500 has increased by 14.8%.
