The time has come! On Monday, May 9, AMC Entertainment will report Q1 results. AMC stock (AMC) - Get AMC Entertainment Holdings Inc. Class A Report has been down a painful 48% YTD. Will shares finally find some traction after earnings day?
Wall Street Memes will follow the events of the day in real time, via live blog, as we usually do. Below, we start with a brief summary of what to expect. To jump straight into the action, scroll down to the section “Live blog starts here”.
(Read more from Wall Street Memes: What Failure-to-Deliver Data Says About AMC Stock)
AMC earnings: what to expect
AMC will report earnings only days after an uncomfortable selloff in the equities market. Can the company’s results turn investor sentiment around?
The expected timeline on May 9 is as follows:
- The stock market will close at 4 p.m. EST. We start the live blog then.
- AMC should drop its earnings release between 4:15 and 4:20 p.m. EST — although oddly, the company was 45 minutes late doing so last quarter.
- The earnings call begins at 5:00 p.m. EST (listen to it here), and should last for about 60-70 minutes.
Regarding the hot topics of the day, I expect the pandemic recovery story to resume. As a refresh from last quarter’s earning season, attendance, average ticket size, food and beverage demand seem to be trending in the right direction.
Outside the P&L, the balance sheet should be robust, and investors will probably be looking for further cash flow improvement. Expect conversations about debt retirement and investments in new ventures (e.g., crypto, NFT, popcorn, merchandise, etc.) to resurface.
Revenues and earnings are not projected to improve sequentially, compared to Q4 of last year. This is the case due to the timing of certain movie releases, which in turn should make Q2 and beyond look much better. Keep this in mind as you sift through AMC’s numbers.
For a more detailed preview of AMC’s earnings, check out our recent article.
Live blog starts here
6:03 p.m. EST: Thanks for being with us today. Have a great Monday evening!
6:02 p.m. EST: AMC stock end the call up +4.3%. It was a good evening for AMC and its shareholders, after much bearishness during the regular trading session. AMC continues to recover well from the pandemic and to make progress on new business initiatives — popcorn, NFT, crypto and other forms of payments, etc. Fundamentally, the story remains one of gradual improvement.
6:00 p.m. EST: Earnings call is wrapping up!
5:59 p.m. EST: Question on Dreamscape, AMC's virtual reality initiative. CEO seems excited about it, although not so much about the economics. He thinks that pursuing new opportunities is what matters, including in sporting events, etc.
5:57 p.m. EST: Question on AMC vs. the competitive pressures of streaming. CEO seems convinced that Hollywood understands the need to support theatrical releases and theatrical windows. He points out that the quantity of movies during the pandemic dropped, but that new titles are now seeing the light of day. People have been going to the theaters for a century, and theaters will remain relevant, according to CEO.
5:54 p.m. EST: Question on NFT. Adam says that 8 projects are already live. Assets are given away for free, but company could explore selling some of them in the future. AMC "way out in front" of competition regarding NFT.
5:52 p.m. EST: Question on crypto as a form of payment, to what extent are they being accepted? CEO says that this was an idea from shareholders, and it has been "a massive homerun" for AMC. Adam says that the benefit came from the company exploring all sorts of payments other than crypto, including PayPal, PicPay, etc. AMC Coin is something that could still be considered in the future, pending regulatory matters.
5:48 p.m. EST: Question on dividends, when will one come out? CEO says that this is not a decision for today, but for next year.
5:45 p.m. EST: Question on AMC merchandise. Company testing concept at theaters, results have been very positive. CEO and team are exploring the opportunities for the second half of 2022.
5:44 p.m. EST: Question about retail popcorn, when will it be available in stores? CEO says that, hopefully, Q4. Conversations ongoing with retailers. Adam Aron seems confident about AMC's brand appeal helping to support this business initiative.
5:42 p.m. EST: Question from shareholders regarding the upcoming shareholder meeting on June 16. Adam invites investors to attend. All proxy papers have been filed. Shareholders should receive them by mid-May.
5:40 p.m. EST: Q&A should start any moment now.
5:39 p.m. EST: Past 6% now, shares heading to 7%. Interesting price action in the past couple of minutes!
5:38 p.m. EST: Not sure if related to this part of the earnings call, but AMC stock is back up to nearly +6% in afterhours.
5:37 p.m. EST: Adam now addresses the pressing issues impacting retail investors, including their skepticism towards matters like dark pools, fail-to-delivers, etc. The CEO has been very attentive to his investors' concerns for the past many months.
5:36 p.m. EST: CEO is wrapping up his prepared remarks by giving a shout out to his "committed retail investors". He has received a binder from a group of them with 1,000 business ideas.
5:34 p.m. EST: CEO talks about acquiring new locations and renovating existing ones.
5:33 p.m. EST: AMC stock is moderating a bit, now up +3.8% after climbing above +5% a few minutes ago (and back to same levels of the start of the earnings call).
5:33 p.m. EST: On pricing initiatives, AMC is charging more for peak demand and less for softer demand. Strategy is working well, according to CEO.
5:32 p.m. EST: On NFT, AMC already has 8 projects live. Company will continue to explore opportunities. On crypto, AMC accepts a wide array of options now.
5:30 p.m. EST: AMC looking to explore credit card opportunity in about one year.
5:30 p.m. EST: On popcorn, AMC diving deeper into the retail popcorn market for late 2022 launch (across the US in Q4).
5:29 p.m. EST: "Looking for more value-creating investments", says the CEO.
5:28 p.m. EST: It is not enough to bring AMC back to pre-pandemic levels, says the CEO. Adam wants to transform the company, and he says that the gold mining investment in Hycroft is an example.
5:25 p.m. EST: Update on initiatives... "recovery, agility and transformation" is AMC's motto, says the CEO. Company playing offense once again. Soon, AMC will be back to normal, according to executive.
5:24 p.m. EST: CEO Adam Aron is back on.
5:23 p.m. EST: Investment in Hycroft mining company generated a gain in Q1.
5:21 p.m. EST: Three new theaters opened and 12 closed in Q1.
5:20 p.m. EST: CFO addresses uses of cash, which includes (1) supporting operations, (2) repaying high-interest loans and deferred rent, (3) investing in growth, etc.
5:19 p.m. EST: Ok, ugly FCF number has been addressed... cash burn was due to normal seasonality in working capital in Q1. Cash burn is expected to improve substantially in the second half of 2022, then turn positive in Q4.
5:17 p.m. EST: Renting theater space to organizations during non-movie hours has helped to increase "other theater" revenues.
5:15 p.m. EST: CFO reviews key op metrics, most of which I have already addressed earlier.
5:14 p.m. EST: AMC stock price inched higher in afterhours, now up more than +5%.
5:13 p.m. EST: Revenue still well below pre-pandemic levels, but numbers were aligned with company's expectations shared last quarter. Q2 has started off strong, driven by Doctor Strange debut last weekend.
5:12 p.m. EST: 39 million attendance, much higher YOY (I reviewed these numbers below). Revenues higher YOY by more than fivefold.
5:12 p.m. EST: Call is handed over to CFO Sean Goodman.
5:11 p.m. EST: CEO Adam calls for AMC's revenues to reach or approach pre-pandemic revenues still in 2022. This is a big milestone.
5:10 p.m. EST: Adam talks about how demand for movies at the theater should remain strong. I'm paraphrasing him: "people want to escape inflation, higher interest rates and their phones".
5:08 p.m. EST: Movie lineup also looks solid in the second half of 2022, according to Adam Aron
5:06 p.m. EST: CEO talks about how strong box office has been in Q2 so far. Not a surprise, Mr. Aron seems very upbeat about the rest of 2022.
5:05 p.m. EST: CEO says that softer Q1 vs. holiday quarter, which was expected, is solely due to timing of title lineup. This is not a COVID-19 or lack-of-demand story. Adam raves about Doctor Strange.
5:04 p.m. EST: Once they make it to the theater, "guests are spending like never before". I had made this observation below.
5:03 p.m. EST: CEO Adam Aron starts. He credits The Batman and Sonic for a good Q1.
5:00 p.m. EST: Earnings call has started!
4:59 p.m. EST: A couple of observations... (1) AMC stock up +3.3% ahead of the earnings call, and (2) I'm a bit surprised to see AMC rank only 6th in popularity at this moment, according to Ape Wisdom. Palantir, Tesla and GameStop are all "hotter topics" of debate online, precisely on AMC's earnings day.
4:58 p.m. EST: Ok, I'm back! If you also want to listen to the earnings call, use this link.
4:50 p.m. EST: This might be a good time to take a quick, 10-minute break... I'll be back at around 5 p.m. EST for the earnings call, stay tuned!
4:48 p.m. EST: AMC stock still up in afterhours, just short of +4%. The earnings call starts in just about 10-12 minutes.
4:47 p.m. EST: I always find it fascinating to note how US moviegoers spend about two-thirds of the ticket price in goodies at the concession stand. This ratio is lower internationally, at about 40%.
4:45 p.m. EST: Food and beverage per patron increased in the US as well vs. the holiday quarter, by about 30 cents to $7.52. Internationally, the trend was actually the opposite, a sequential decline of 24 cents to $4.40.
4:43 p.m. EST: I wonder if this has something to do with AMC's strategy of charging more at the box office for certain movies at certain times, including The Batman.
4:42 p.m. EST: A couple other things that I've noticed in the press release... Q1 has been a slower quarter of attendance vs. Q4, as expected, but at least average ticket price in the US improved 55 cents to $12.05 sequentially.
4:40 p.m. EST: Still, considering what is likely to be improving business fundamentals in 2022, AMC's liquidity position seems to be just fine.
4:39 p.m. EST: As a result, cash balance dipped noticeably since the holiday quarter... from $1.59 billion to $1.16 billion.
4:38 p.m. EST: Free cash flow was actually a bit of an eye sore, at negative $330 million. This is about as bad as cash flow had been in Q1 of last year. I don't believe that AMC releases its cash flow statement with the earnings release, so it's hard to dig deeper.
4:33 p.m. EST: It's not only the P&L that matters for AMC... the balance sheet and the cash flows that feed it are also crucial. Let's look at them.
4:31 p.m. EST: So far, investors seem pleased by what they saw in the earnings release. AMC is still up in afterhours, this time by about +4%. About half of the regular session losses have been erased.
4:30 p.m. EST: Food and beverage revenues increased 5x YOY to $252.5 million, which compares to 8.5x higher YOY in the holiday period. Still, impressive numbers. Movie goers are reaching deeper into their pockets and buying those popcorns!
4:28 p.m. EST: This could be merely the result of the lumpiness in movie title releases. We already knew, heading into today, that Q1 operating metrics would be a bit challenged in this regard.
4:26 p.m. EST: Total attendance of 39.0 million in Q1 was 4x larger vs. the same period in 2021. However, I should point out last quarter's attendance had been 7x larger YOY.
4:24 p.m. EST: The CEO lists several movie titles that have either helped with the COVID-19 recovery in Q1, or that will do so over the next few months.
4:23 p.m. EST: CEO Adam Aron points out that this is AMC's "strongest first quarter in two full years"... "more than quintupling revenues and improving adjusted EBITDA by nearly eighty percent compared to a year ago".
4:21 p.m. EST: Revenues of $785.7 million is better than expectations! Net loss of -65 cents is roughly in line.
4:19 p.m. EST: And here's the earnings release! Let's look at the numbers...
4:18 p.m. EST: AMC stock heading higher still! Up 6% in after-hours trading!
4:17 p.m. EST: FYI, "Doctor Strange in The Multiverse of Madness" launched this past weekend, and the movie has been quite a success. Box office from the past few days will not be reflected in the Q1 numbers, but it could show up in the outlook.
4:15 p.m. EST: AMC stock is trading higher by 3% in afterhours... I don't think that the earnings release has come out yet, but traders seem to be establishing positions already.
4:13 p.m. EST: More important than Q1 results, the narrative for the rest of 2022 might be most important. CEO Adam Aron tends to be a very optimistic person, and AMC has been recovering from the recession well. Will investors buy into the story?
4:10 p.m. EST: I'm not sure how much the Q1 headline numbers will matter for AMC stock, but let's revisit them... consensus is for YOY revenue of $743 million and net loss per share of -67 cents.
4:08 p.m. EST: Theoretically, AMC's numbers should come out in about 12-15 minutes. Last quarter, the press release did not come out until 5 p.m. EST, but that was unusual.
4:07 p.m. EST: At just short of $13 per share, AMC is now down 80% from the June 2021 high.
4:06 p.m. EST: AMC stock ended the trading day lower by almost 9%... Nope! Not fun.
4:05 p.m. EST: And WHAT A DAY it has been in the markets! S&P 500 down another bunch, heading closer to bear market territory.
4:04 p.m. EST: Hello, everyone! The closing bell has rung... welcome to live coverage of AMC's Q1 earnings day!
7:00 a.m. EST: It’s earnings day for movie theater operator and “ape favorite” AMC Entertainment! Check back with us at the closing bell for full coverage of Q1 results.
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)