The stock of AMC Entertainment (AMC, Financial) experienced a 2.2% rise, adding 6 cents to reach approximately $3.02. The options trading activity remained consistent with its usual levels, with 32,000 contracts exchanged. Calls were more prominent than puts, leading to a put/call ratio of 0.46, which is higher than the usual 0.25.
Implied volatility, measured at a 30-day horizon (IV30), decreased by 3.23 points, landing near 60.67. This volatility level falls within the lowest 10% of observations over the past year, translating to an anticipated daily price movement of $0.12. The steepening of the put-call skew suggests there is heightened market interest in obtaining downside protection.
AMC Key Business Developments
Release Date: May 07, 2025
- Domestic Admissions Revenue Decline: 10.9% decline, outperforming the North American box office which was down 12.4%.
- Consolidated Revenue per Patron: Up 1.6% year over year on a constant currency basis; up 40% compared to pre-pandemic 2019.
- Food and Beverage Revenue per Patron: Increased by 49% compared to pre-pandemic 2019.
- Admissions Revenue per Patron: Increased by 26% compared to pre-pandemic 2019.
- Contribution Margin per Patron: Increased by 3.7% year over year; approximately 51% higher than pre-pandemic 2019.
- US Admissions Revenue per Patron: Achieved an all-time Q1 record of $12.31.
- International Revenue per Patron: Up 32% on a constant currency basis compared to pre-pandemic 2019.
- International Contribution Margin per Patron: Up approximately 39% on a constant currency basis compared to pre-pandemic 2019.
- Net Theater Reduction: Closed 200 locations and opened 62 since January 2020, a net reduction of 138 theaters.
- Cash and Cash Equivalents: $378.7 million, excluding restricted cash of $49 million.
- Free Cash Flow Expectation: Anticipated to be positive for the nine months ending December 31, 2025.
- Debt and Deferred Rent Reduction: Reduced by $1.34 billion since the beginning of 2022.
- Net CapEx: Expected to be in the range of $175 million to $225 million for 2025.
- Deferred Rent Balance: Approximately $34.3 million at the end of Q1, with plans to reduce by $4.7 million during the remainder of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AMC Entertainment Holdings Inc (AMC, Financial) surpassed Wall Street expectations for the first quarter of 2025, demonstrating resilience despite a challenging box office environment.
- The company achieved an all-time first quarter record for US admissions revenue per patron, highlighting the enduring power of the AMC brand and its loyalty programs.
- AMC's strategic initiatives, such as the AMC Go plan, are focused on enhancing the guest experience and optimizing profitability, positioning the company well for future growth.
- AMC's food and beverage revenue per patron increased by 49% compared to pre-pandemic levels, showcasing successful innovation in this area.
- The company has strategically managed its theater portfolio, closing underperforming locations and opening high-performing ones, which has improved overall profitability.
Negative Points
- The first quarter of 2025 was the lowest industry-wide domestic box office since 1996, indicating a slow start to the year.
- AMC's domestic admissions revenue declined by 10.9% compared to the previous year, reflecting the challenging box office environment.
- The company requires significant growth capital to expand initiatives like recliner seating and premium format auditoriums, which may be constrained by current financial resources.
- AMC's cash and cash equivalents decreased to $378.7 million, excluding restricted cash, highlighting potential liquidity concerns.
- The company faces uncertainties related to potential tariffs in Hollywood, which could impact future operations and profitability.
