Six Flags improves on first quarter results with higher attendance and spending
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From the press release:
Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of waterparks in North America, today reported first quarter 2022 financial results.
“Six Flags has been quickly executing to improve the guest experience, improving ride throughput by increasing ride uptime and implementing single rider lanes on busy days; improving staffing and training of our team members; upgrading our park appearance, including our front gates, restrooms and restaurants; providing better food quality; and offering more guest amenities such as benches, shade structures, and children’s areas,” said Selim Bassoul, President and CEO. “We have reoriented our culture to prioritize the guest in everything we do, and we fundamentally believe this will drive significant and sustainable long-term earnings growth.”
Total revenue for first quarter 2022 increased $56 million, or 68%, compared to first quarter 2021, driven by higher attendance and guest spending per capita. The increase in attendance was driven by increased operating days the quarter compared to the prior year period, which was negatively impacted by pandemic-related closures and operating restrictions. The increase in operating days was offset by a visitation shift of approximately 200 thousand guests from the first quarter to the second quarter 2022 due to the later timing of the Easter holiday, which caused some schools to schedule spring-break vacations in the second quarter of 2022 versus the first quarter in 2021. In addition, there were three additional days included in first quarter 2021 compared to first quarter 2022 due to adoption of a fiscal reporting calendar in the quarter commencing January 1, 2021, which accounted for 89 thousand additional guests in first quarter 2021.
The $19.30 increase in guest spending per capita compared to first quarter 2021 was driven by a $10.33 increase in Admissions spending per capita and a $8.97 increase in In-park spending per capita. The increase in Admissions spending per capita was primarily driven by higher realized ticket pricing and revenue from memberships beyond the initial 12-month commitment period—in first quarter 2021, the company did not recognize membership revenue from members whose home park was closed due to the pandemic. The higher In-park spending reflects the company’s in-park pricing initiatives and positive consumer spending trends.
Since most of the parks are not scheduled to be open during the first quarter, the company had a net loss of $66 million in first quarter 2022. The loss per share was $(0.76) compared to a loss per share of ($1.12) in first quarter 2021. Adjusted EBITDA was a loss of $16 million, an improvement of $30 million compared to first quarter 2021, reflecting higher revenue and improved margins.
In first quarter 2022, the company invested $29 million in new capital, net of insurance recoveries. Net debt as of April 3, 2022, calculated as total reported debt of $2,631 million less cash and cash equivalents of $252 million, was $2,379 million. Deferred revenue was $185 million as of April 3, 2022, a decrease of $60 million, or 25%, from April 4, 2021. The decrease was primarily due to the deferral of revenue in the prior year period from guests whose benefits were extended from 2020 into 2021 due to the pandemic.
Read the entire press release from Six Flags.
It was more than a week. It hasn't been that high since 4/25. Pretty much all entertainment stocks have tanked in the last month in a similar fashion, including FUN, SEAS and DIS. Plus cruise lines, hotel brands and such.
Jeff - Editor - CoasterBuzz.com - My Blog
Inflation at 40 year highs puts pressure on discretionary spending such as entertainment. Federal Reserve has had controlled/limited inflation as a stated goal for a while now and will/has increased interest rates to combat inflation. Fed believes it can engineer a soft landing but others are skeptical and expect a recession at some point. Much of economy is addicted to low interest rates. Many people today talk about "high" mortgage interest rates which are still low by historical standards by 2% or so. Increasing interest rates will impact many individuals/businesses.
The stock market doesn't react rationally to anything. You would think it would have tanked at the start of the pandemic. All of the businesses I mentioned have had pretty solid rebounds. Tech companies that have matured into long term businesses are also being undervalued for no obvious reason.
Jeff - Editor - CoasterBuzz.com - My Blog
Much like crypto, the market seems to be as much (or more) driven by "another fool" than by underlying fundamentals.
Hobbes: "What's the point of attaching a number to everything you do?"
Calvin: "If your numbers go up, it means you're having more fun."
Crypto is speculation not investing. Stock markets are more nuanced. They are speculative to a degree but much less so than crypto. And based to a large extent on expectations. Often bad/good news is already baked into the markets before official announcements.
Stocks did crash at the beginning of Covid. But once it became clear that governments across the globe had turned on money cannons, the markets took off. Expectations were quicker to move than the actual economy.
There are also some contra indications for the market. Great jobs reports are often hailed for the economy. But for the markets they often mean higher inflation which lead to interest rate hikes and slowing of economy. So markets often respond other way in terms of good or bad economic news.
Well the “premiumization” continues by squeezing more money out of us little guys and giving us less. We ordered chicken strips and only got 3 and a tiny cup of fries. At another place we got 4 strips and only chips (fries were a $2 up charge). I know something had to change on the dining passes and I get the dropping bring a friend free days although we always used ours to bring underprivileged kids. I expect to see very little capital spent on rides since according to the previous earnings call they say they have adequate thrill rides… this coupled with such a premium now on passes to get into other parks and I believe we will be skipping next season. So I guess the strategy is working- lower attendance.
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