Six Flags posts decreases in revenue and attendance
Posted
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 fourth quarter revenue of $280 million, Net Income of $13 million, and Adjusted EBITDA of $99 million. For the full year, the company reported revenue of $1,358 million, Net Income of $109 million, and Adjusted EBITDA of $465 million.
“We are pleased to have delivered record fourth quarter Adjusted EBITDA, which provides evidence that our new strategy and our new culture are beginning to take hold,” said Selim Bassoul, President and CEO. “I’m proud of our team’s commitment to elevating the guest experience. In the fourth quarter, we launched three new events and amplified our largest event of the year, Fright Fest, which drove improved attendance trends and guest satisfaction. Our team is hard at work developing an exciting lineup of new events, rides and attractions for 2023, as we look to build on our success in the fourth quarter.”
Fourth Quarter 2022 Results
Total revenue for fourth quarter 2022 decreased $37 million, or 12%, compared to fourth quarter 2021, driven by lower attendance, partially offset by higher guest spending per capita. The decrease in attendance was driven by an increase in ticket prices, the elimination of free tickets and heavily-discounted pass products, and fewer operating days. The company did not open six parks in fourth quarter 2022 that were open for Holiday in the Park in fourth quarter 2021, which accounted for 279 thousand additional guests in fourth quarter 2021.
The $12.15 increase in guest spending per capita compared to fourth quarter 2021 consisted of a $6.60 increase in Admissions spending per capita and a $5.55 increase in In-park spending per capita. The increase in Admissions spending per capita was primarily driven by higher realized ticket prices, a higher mix of single day tickets, and revenue from memberships beyond the initial 12-month commitment period, which is recognized evenly each month and was spread over a lower amount of attendance in 2022 versus 2021. The higher In-park spending reflects the company’s in-park pricing initiatives, and a strong assortment of retail products, food & beverage offerings, rentals, and new events.
The company more than offset the decrease in revenue in the fourth quarter 2022 with lower cash operating costs, driven by full-time headcount reductions, fewer total employee hours worked, and lower advertising costs. These efficiency measures were partially offset by higher wage rates and increases in repair and maintenance, utilities, and other costs due to inflation.
The company had a net income of $13 million in fourth quarter 2022, compared to a net loss of $2 million in fourth quarter 2021. The income per share was $0.16 compared to a loss per share of $0.02 in fourth quarter 2021, driven by lower cash operating costs partially offset by a reduction in revenue. Adjusted EBITDA was $99 million, an increase of $4 million compared to fourth quarter 2021.
Full Year 2022 Results
Total revenue for full year 2022 decreased $139 million, or 9%, compared to 2021, driven by lower attendance, partially offset by higher guest spending per capita. The lower attendance was driven by an increase in ticket prices and the elimination of free tickets and heavily-discounted pass products. In addition, due to the adoption of a fiscal reporting calendar commencing January 1, 2021, there were three fewer days in full year 2022 compared to full year 2021, which accounted for 89 thousand additional guests in full year 2021.Lastly, the company closed six parks for Holiday in the Park in fourth quarter 2022 that were open in fourth quarter 2021, which accounted for 279 thousand additional guests in full year 2021.
The $11.53 increase in guest spending per capita compared to full year 2021 consisted of a $7.26 increase in Admissions spending per capita and a $4.27 increase in In-park spending per capita. The increase in Admissions spending per capita was primarily driven by higher realized ticket prices and a higher mix of single day tickets. The higher In-park spending reflects the company’s in-park pricing initiatives, and a strong assortment of retail products, food & beverage offerings, rentals, and new events.
The company partially offset the decrease in revenue in full year 2022 with lower cash operating costs. The reduction in operating costs was driven by full-time headcount reductions, fewer total employee hours worked, and lower advertising costs. These efficiency measures were offset by higher wage rates and increases in repair and maintenance, utilities, and other costs due to inflation.
The company had net income of $109 million in full year 2022, compared to $130 million in the prior year period. The income per share was $1.29 compared to an income per share of $1.50 in full year 2021. Adjusted EBITDA was $465 million, a decrease of $33 million compared to full year 2021, driven by lower revenues, partially offset by a reduction in expenses. During the second quarter 2021, the company received $11 million related to one of its terminated international development agreements in China. Excluding the impact of this payment, Adjusted EBITDA decreased $22 million compared to full year 2021.
Listening to these guys talk yesterday does not inspire confidence, and Selim’s obsession with ApplePay is baffling.
Do tell... what does that mean? As in "phone payments" in the abstract? Because if it's only Apple, they would be leaving out 45% of the American market.
Jeff - Editor - CoasterBuzz.com - My Blog
He has mentioned how Six didn’t support mobile payments on just about every call since he’s joined. Thank goodness he had the vision to add this throughout the company! I get the convenience factor but it’s such a small portion of the visitors, doesn’t meaningfully change transaction times and doesn’t drive incremental sales- why even mention it to your investors?
Last number I saw was that 40%+ of US phone users used mobile payments. I'm sure people have cards or cash, but that's pretty crazy to not have the option.
Jeff - Editor - CoasterBuzz.com - My Blog
From the earnings call:
Selim Bassoul -- President and Chief Executive Officer: On the technology front, we are on the process of integrating mobile payment technology, such as Apple and Google Pay to make checkout speed significantly quicker and to reduce stress on our frontline team members. And we are excited to launch a new vastly improved mobile app this summer, which will help streamline our guest experiences at our parks. We're also investing heavily in our food service operations with new equipment, renovated facilities, and staff training. We've already received great guest feedback, and we are committed to continuing to elevate the guest experience to meet their evolving expectations.
Jeff:
40%+ of US phone users used mobile payments.
Was this only point-of-sale, or did it also include paypal/venmo/zelle/etc.? I don't see a lot of people using phones at point-of-sale terminals, but there is a LOT of person-to-person (and small business) payments over the various apps.
I could also just be living among The Olds.
Good question, I'm not sure. I don't think there are any places that I go regularly that I can't use my phone at this point, but I'm never really watching to see if others are doing the same.
Jeff - Editor - CoasterBuzz.com - My Blog
I think the bigger thing is to compare this with Cedar Fair's report. Again, not that everything was rosy with CF, but these numbers are somewhat in the opposite direction.
My partner owns a pub on a university campus so the crowd is mostly grad students and profs. He noticed that currently about half of the transactions now are via phone taps so either google or apple pay.
SFOT had Apple Pay several years ago… so I got used to only taking my phone and not my wallet and suddenly they discontinued it and I was stranded with no way to buy anything! I’m at a loss of why it went away!?
The economy hates poor people (includes mention of Six Flags’ results).
I'm not saying that the this strategy won't work, but I'm skeptical because of the workforce reduction. You can't have a premium experience with less people. Everything I've done that feels premium usually involves more people doing stuff for you. Think concierge level in hotels and cruises, for example.
Jeff - Editor - CoasterBuzz.com - My Blog
It appears they are doing the same thing as SEAS to pump up profits. Closing attractions, food service, cutting landscaping, workforce reduction etc. I cancelled my BGW membership because the experience had become so lackluster.
SIX’s parks are already rather trashy so cutting expenses to offset drop in attendance is leading to the lowest possible park experience. It won’t work long term. It’s a snowball.
They recently slashed their season pass prices thus quarter so that indicates desperation because of low sales.
Theme parks are booming post pandemic. Bassoul totally wrecked SIX and caused much damage to investors. Why hasn’t he been fired?
IMO Cedar Fair currently offers a quality experience at reasonable (season pass) prices. They are improving experiences with theming. I feel that last year their parks were well staffed and practically all attractions and park areas operate from open to close. As well as almost all dining locations. I don’t feel they they are pinching pennies for profits at the cost of the guest experience like the other 2 chains. I’ll be attending these parks more in the future instead of SIX or SEAS.
Last time I was at a SF park was 2018. I’ve been to every other chain in the past year. This report really isn’t enticing me back. Although if I decide to go back to Texas, SFFT would still get a visit. That’s always been the best SF park by a wide margin in my opinion.
2022 Trips: WDW, Sea World San Diego & Orlando, CP, KI, BGW, Bay Beach, Canobie Lake, Universal Orlando
So true. Not even the $149 all park season pass is attractive to me. I don’t want yo spend my theme park days in such mismanaged run down parks.
Fiesta Texas seems to be the exception to the trashy parks but looking at their calendar they only operate until 6 PM most days in the blazing TX heat! More cost cutting at the expense of the guest experience.
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