Canadian exhibition giant Cineplex underlined the impact of its Hollywood movie supply upended by the 2023 actors and writers strikes as it released its second quarter financial results on Friday.
Cineplex saw box office revenue drop 30 percent to $114.5 million, and theater attendance, especially in April and May, was off by nearly 32 percent to 8.7 million moviegoers for the quarter, due in large part to the post-strike disruption to the chain’s release schedule with a reduced supply of product.
Box office rebounded in June with the release of Inside Out 2, followed by box office success with Despicable Me 4 and Twisters. But the prolonged impact of the Los Angeles labor action last year had by then been felt.
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Cineplex swung to a Q2 loss of $21.4 million, compared to a year-ago profit of $176.5 million, on overall revenue down 25 percent to $277.3 million.
Despite the industry headwinds from the post-strikes overhang, Cineplex CEO Ellis Jacob said second quarter represented a turning point for the exhibition sector as the company gets set to open new venues. “We believe we’ve reached a pivotal point in the post-strike rebound, with a variety of content hitting the big screen on a consistent basis to keep movie-goers on the edge of their seats,” Jacob told analysts during a morning call in prepared remarks.
“The pipeline of blockbusters over the next several years is truly remarkable. This is a promising moment for our business and shareholders,” he added.
During the latest quarter, box office revenue per patron came to $13.11 compared to a year-ago $12.84, and concession revenue per person was $9.56, up from $9.21 in the same period last year. Both metrics represented all-time records.
Both key metrics for Jacob is proof during economic downturns historically consumers forego more expensive entertainment options for the local multiplex. “When we’ve been through recessions before, hard economic times, the actual spend of the guests increases and the attendance increases because they cut back on more expensive activities like concerts and sporting events, and movies are a nice form of reasonable entertainment for guests and their families,” he told The Hollywood Reporter.
Jacob added the box office per patron metric is partly driven by movie-goers upgrading to Imax and other premium theater offerings. And much, as always, depends on the movie product screened in Cineplex theaters.
“I feel strongly and I’m very optimistic, based on the product coming up, and what we’ve had in July and August. Deadpool was incredible,” Jacob said, pointing to opening box office from July 26 for Marvel Studios’ Deadpool & Wolverine, the third entry in the superhero series.
