AMC’s profitability hangs on the domestic box office topping $2 billion in Q4. Here’s what would need to happen

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  • AMC said it would be able to post positive cash flow in the fourth quarter if domestic box-office earnings hit $2 billion in October, November and December.
  • Analysts are divided on whether they think the target is attainable, with some saying the target is easily achievable and others appearing a bit more skeptical.
  • Ticket sales of $637.3 million were collected in October, with $1.36 billion to be distributed in November and December if AMC is to achieve its target.

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AMC Entertainment has set a new, more attainable target for the 2021 domestic box office in its bid for a profitable fourth quarter.

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The movie theater chain said Monday that it would be able to post positive cash flow in the fourth quarter if box-office earnings hit $2 billion in October, November and December.

Its previous target, which it predicted in August, was to reach at least $5.2 billion for a full-year domestic box office.

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Analysts are divided on whether they think a $2 billion domestic box office is attainable in the fourth quarter, with some saying it is easily achievable and others appearing a bit more skeptical.

“Our published estimates suggest that the Q4 domestic box office could reach or exceed $2 billion,” said Wedbush analyst Alicia Reese. “With these assumptions and AMC’s demonstrated expense management, we expect AMC to reach positive EBITDA in the fourth quarter.”

According to data from comScore, the $2 billion outlook for the fourth quarter assumes that it will collect roughly 75% of the box office collections during the same period in 2019, up from about $2.9 billion.

Eric Handler of MKM Partners said, however, that the film slate for the rest of the year faces tough comparisons with films released two years ago. These included “Joker,” “Frozen II,” “Jumanji: The Next Level” and “Star Wars: The Rise of Skywalker,” which delivered huge domestic box office returns.

With about seven weeks left before the end of the year, box-office analysts are predicting that final ticket sales numbers will come in between $4 billion and $4.7 billion.

Before the pandemic, it was quite easy to make predictions at the box office based on decades of data. However, with variable release strategies, ongoing changes to security measures, and continued caution from certain demographics, it has been challenging to project how individual films will perform and exceed expectations throughout the year.

The domestic box office grossed $2.4 billion in the first three quarters of the year, according to data from comScore. Including the October run and the first week of November, the box office totals $3.2 billion year-over-year. To reach AMC’s goal, the full-year box office would need upwards of $4.4 billion.

“While October was the best month of the pandemic era in North America and delivers a strong tailwind for the last two months of the year in theaters, it will still be a heavy lift to pack $2 billion in the final quarter of this most unusual box -office year,” said Paul Dergarbedian, senior media analyst at comScore.

AMC’s dependence on unpredictable box office is likely to lead it to explore new avenues to generate revenue. In addition to acquiring new theater leases and offering new content, such as pretaped concerts and live sports, AMC will expand into the popcorn retail business and oversee ventures into cryptocurrency, NFTs and credit cards.

Ghost, Gucci and the Generation Gap

Strong results in October, when ticket sales hit record highs for the year, suggest AMC’s $2 billion target is well within reach. After all, the month earned $637.3 million from films like “Halloween Kills,” “Venom: Let There Be Carnage” and “No Time to Die,” excluding the $1.36 billion that would need to be distributed in November and December.

However, box-office analysts predict November will have a shorter haul collection, especially with fewer blockbuster titles and more independent, Oscar-bait films than October, which typically see smaller results.

Disney’s latest Marvel film, “Eternal,” made $71 million during its domestic debut over the weekend, but analysts estimate weak reviews and poor word-of-mouth led to a massive second week in ticket sales. There will be a decline. ,

Next week, Sony’s “Ghostbusters Afterlife” exclusively hits theaters. The promise of a return of fan-favorite characters from iconic ’80s movies may entice older moviegoers, but it’s not clear whether younger audiences will be more likely to fuel much of the box office. The film is currently clocking an opening weekend estimate of between $45 million and $65 million.

“King Richard” and “House of Gucci” are garnering attention ahead of their respective releases later this month. But as their content leans toward mature audiences, which have been slow to return to theaters, analysts aren’t sure they’ll be moving the needle in terms of ticket sales. Both films are biographical, with one focusing on tennis stars Venus and Serena Williams’ father and early coach, and the other focusing on Patrizia Reggiani’s marriage in the Gucci family and its fatal consequences.

November also includes the release of Disney’s latest animated feature, “Encanto.” With the COVID vaccination now available for children, this film could have a solid start. Other children’s content has struggled to attract audiences due to coronavirus concerns. The availability of children’s vaccines could also bode well for the December release of Universal’s “Sing 2.”

importance of spider man

December could be a bit better than November, especially with “Spider-Man: No Way Home” expected to dominate the box office. However, its December 17 release means that the 2021 box office will only benefit from its ticket sales for two weeks.

Several box-office analysts estimated the film to be worth around $100 million for its debut. However, if it follows a second week drop like other Marvel movies, it will likely bring in less than $200 million domestically before December 31st.

“West Side Story” is expected to clock the same box office as “King Richard” and “House of Gucci”. Based on the music of Leonard Bernstein and Stephen Sondheim, the film is primarily expected to captivate older audiences.

“The Matrix Resurrection” will also draw on nostalgia, as well as the general audience’s affinity for actor Keanu Reeves. It’s unclear if younger viewers will flock to the feature, especially since it will also be available on HBO Max on the same day.

“The heat is on to really perform at their maximum potential for all the titles set for the holiday season,” said Dergarabedian.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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