Cinemark starts 2024 strong with robust earnings By Investing.com

Cinemark Holdings Inc. (NYSE: NYSE:) has kicked off the first quarter of 2024 on a positive note, outperforming expectations with strong revenue and earnings. The company reported nearly $580 million in revenue and $70 million in adjusted EBITDA.

Despite a modest decline in the North American box office, popular titles like “Dune Part Two” and “Kung Fu Panda 4” contributed to the company’s success, drawing nearly 40 million guests. Cinemark’s management remains upbeat about the future, with a solid film lineup and strategic initiatives aimed at enhancing the movie-going experience.

Key Takeaways

• Cinemark reported $579.2 million in worldwide revenue and $70.7 million in adjusted EBITDA for Q1 2024.
• The company retired $150 million of COVID-related debt, demonstrating financial resilience.
• A total of 40 million guests were entertained, with the North American industry box office showing a modest decline.
• Cinemark’s average ticket price rose to $9.82, and the domestic concession per cap hit a first-quarter record of $7.57.
• The company is optimistic about the future, with plans for capital expenditures of $150 million and a net leverage ratio of 2.8 times.
• Upcoming films and industry events like CinemaCon signal a positive outlook for theatrical releases.

Company Outlook

• Cinemark expects a similar volume of wide releases in 2024, with a back-loaded year due to larger films releasing in the fourth quarter.
• The company is optimistic about 2025, anticipating an improvement that could reach pre-pandemic levels.
• Strategic initiatives are in place to drive incremental value, including premium amenities, improved food and beverage options, and pricing sophistication.

Bearish Highlights

• The company faced sequential pressure from title shifts and the impact of Hollywood strikes.
• There is ongoing pressure on wages, which is being mitigated by scaling labor hours and driving productivity.
• Inflationary pressures are expected to persist through 2024, impacting concession costs.

Bullish Highlights

• Studios are focused on replenishing production, aiming to return to pre-pandemic output levels.
• Cinemark’s market share performance was strong in Q1, thanks to outperforming titles.
• Alternative content like concerts and faith-based films contributed to 14% of box office revenue.

Misses

• Despite growth, there was a lower incidence rate in concession sales due to the content mix in the quarter.

Q&A…