AMC Staring At 'Increasingly Favorable Environment,' CEO Says With 7 Million People Walking Into Its Theaters In Q1

AMC Staring At 'Increasingly Favorable Environment,' CEO Says With 7 Million People Walking Into Its Theaters In Q1

Photo by Dave Dugdale on Flickr

AMC Entertainment Holdings Inc. (AMC) CEO Adam Aron has expressed optimism about the movie theatre chain’s prospects, saying it is looking at an “increasingly favorable environment” for movie-going in the coming months.

What Happened: Aron attributed the favorable environment partly to the U.S. vaccination program and the arrival of long-awaited new movie title releases to theatres.

The CEO added that AMC, which reported its first-quarter results on Thursday, was able to attract about 7 million U.S. and international moviegoers to its theatres in the quarter.

AMC said that as of the Q1-end, it was operating at 585 domestic theatres, representing about 99% of domestic theatres, with limited seating capacities of between 15% and 60%.

Capacity restrictions for movie theatres in New York City, a huge market for movie theatres, will be removed effective May 16, the company noted.

For the first quarter, AMC reported a narrower net loss, while revenue fell 84% year-over-year. The results missed analysts’ estimates.

Why It Matters: AMC managed to avoid bankruptcy amid the pandemic after the closure of theatres forced the company into a cash crunch. The company reopened 98% of its locations in March.

Despite its weak finances, AMC shares have been popular among retail investors. Traders belonging to the Reddit Investor forum r/WallStreetBets bid up AMC and other heavily shorted stocks such as GameStop Corp. (GME) to create a short squeeze earlier this year. AMC Entertainment’s stock has returned year-to-date gains of 324.5%.

Price Action: AMC shares closed almost 1.9% lower in Thursday’s regular trading session at $9.00, but rose 2.6% in the after-hours session to $9.23.

© 2021 Benzinga does not provide investment advice. All rights reserved.

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