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CEO Adam Aron said the company will have more concert movies “later in 2024 and/or 2025” and will feature new Nicole Kidman spots starting March 1.
By Caitlin Huston
Business Writer
AMC Theatres beat Wall Street expectations, reporting fourth-quarter revenue of $1.10 billion, up from $990.9 million in 2022 and a net loss of $182 million, compared to a net loss of $287.7 million in 2022.
For the full year, the theater chain reported total revenue of $4.8 billion, up from $3.9 billion in 2022. Net loss improved to $396.6 million, up $577 million from a year earlier.
AMC Theater CEO Adam Aron said that “literally all” of the increase in revenue in the fourth quarter was driven by Taylor Swift and Beyoncé. Total attendance in the fourth-quarter grew to 51.9 million, up 4.7 percent from a year ago.
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“What is particularly noteworthy is how much AMC benefited from our trailblazing industry leading efforts with our highly successful distribution of two concert movies Taylor Swift: The Eras Tour and Renaissance: A Film By Beyoncé,” Aron wrote in the press release. “Despite a diminished box office overall, in the fourth quarter compared to the same quarter a year ago, AMC’s revenue grew by 11.5 percent and AMC’s adjusted EBITDA almost tripled. Literally, all of that increase in AMC’s Revenue and EBITDA is attributable to our having shown these two movies in our theatres in the U.S. and internationally.”
On the earnings call, AMC Theatres management said it is introducing a new version of its Nicole Kidman commercial.”
“Before every movie starts, and starting March 1, we’re going to show three different, 30-second Nicole Kidman commercials before the movie starts on a rotating basis,” Aron said.
A spokesperson later clarified that the spots are not “new ads or sequels” but “never-before-seen-in-theatres versions of the original, iconic ad.”
Aron said the company’s “phones have been ringing off the hook” with requests from musical artists and that the theater chain will have more concert movies “later in 2024 and/or 2025.”
Aside from these two films, fourth-quarter domestic industry-wide box office was down 35 percent versus 2019, as the industry continues to deal with lingering impact from the dual strikes. Still, Aaron said he believes the strike impacts will starts to ease up this spring.
“AMC believes that the box office will start to strengthen again as soon as this coming month of March, in some of the summer months and especially in the latter third of this year. And over the medium term, we are both bullish and optimistic. With all the caveats that no one’s crystal ball is perfect, we currently expect that the industry box office in 2025 will grow by $1 to $2 billion, or more, in size over 2024,” he said.
Due to the impact from the strikes, which Aron reiterated he believes is “temporary,” AMC has “tightened” its operating hours, cut costs, “right-sized” its theater portfolio, as in adding two new high performing theaters and closing nine underperforming locations, and “pushed the innovation envelope in merchandise and food & beverage sales,” Aaron wrote. Part of off-setting the strike impact was also establishing a new revenue stream through the distribution of concert movies.
The company also conducted several stock exchange agreements at the end of 2023 to pay down some of its debt. In the full year 2023, AMC reduced the principal balance of its debt by $448.1 million.
“Given AMC’s proven ability to thread the needle in coping with one Herculean challenge after another, we are confident in our company’s future,” Aron said.
Still, during the call, Aron addressed the pain he believes is felt by his retail shareholders noting that “it was not a good year” for them. He added that he is a shareholder in the company too and has also felt their pain, but will now be taking an added step.
Last week, Aron said he recommended to the AMC Board of Directors that for 12 months, starting now, his target compensation be reduced by 25 percent versus the previous year’s target.
“I am a shareholder. I am holding. I’m not selling. I ride with you,” Aron said. “So when you do well financially with AMC, I will too. But if you’re hurting from that investment, I believe that I too, should be hurting with you as well.”
At the end of the call, Aron addressed the retail investors who have helped prop up the stock, noting that “it was not a good year,” for them, and to whom he said he had promised “straight talk” on what’s happening at AMC.
He said he also wanted to address the “garbage information floating around Twitter, YouTube and other corners of the internet about AMC,” including the “hubbub and litigation” that surrounded AMC and the Delaware Courts in 2023 and further dilution of their shares by selling preferred equity units in Aug 2022 or APES. The cash from these sales was necessary to keep the cash afloat, he argued.
“We did, in dilution, what was absolutely vital for your company to do to get through the many challenges that were thrown our way,” he said.
He also addressed a conspiracy theory about the management team at AMC.
“It’s disappointing how many people out there typing into their Twitter feeds that the management team at AMC is somehow actively working against the interests of our real retail shareholders, and standing nefariously on the side of evil,” Aron said, pointing to this quarter’s results.
“One doesn’t launch popcorn to the home, or blaze new trails with innovative concept movies that have been incredibly profitable and reputationally enhancing for AMC, if one is trying to undermine our company’s success,” he added.
Still, even after that outreach, the stock continued falling 9 percent after the call Wednesday.
Feb. 28 8:02 PM PST: This story has been updated with language from an AMC spokesperson around the nature of the new Nicole Kidman ad spots.
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