AMC reports a blockbuster quarter

It may have been a meme stock during the pandemic, but AMC’s most recent quarter proves the hype is warranted. With a 2,200 per cent increase in its top line — yes, you read that correctly — AMC ended its second quarter fiscal 2021 with $445 million (U.S.) in total revenue compared with $19 million the prior year.

The movie chain’s net loss improved significantly to $344 million, from $561 million in 2020.

The net loss was driven by operating expenses, excluding depreciation, which came in at $246 million for the quarter, compared with $115 million the prior year.

As for the wildly profitable snacks and drinks, the company reported revenue of $162 million from food and beverage with only $26 million attributed to costs.

Pradeep Chintagunta, professor of marketing at the Booth School of Business at the University of Chicago, notes that stimulus cheques have allowed low-income groups to spend money on things they couldn’t afford before the pandemic, which increases the market for nonnecessities.

While an increase in disposable income enables more Americans to spend money on theatres, Chintagunta points out that there has been a shift in the movie industry away from bricks-and-mortar theatres toward streaming services, which would impact future revenue for movie chains.

There is also the recent issue of simultaneous releases, which reduce the exclusive distribution window to zero — some movies are being released in theatres and on streaming services at the same time. Compelling reasons exist for consumers to choose either path.

“It is possible that people are so burnt out from being cooped up at home that they want to go out, but given the fact that we have not solved coronavirus, they might get sick of masks and social distancing at the movie theatre (and decide to) stay at home and use their streaming service (instead).”