Six Flags reports decreases in revenue, calls it a transition year
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From the press release:
“This was a year of transition for Six Flags, as we made bold changes to our business model in order to elevate the guest experience and to position the company for sustainable, long-term earnings growth,” said Selim Bassoul, President and CEO. “While it will take time to achieve our ambitious goals, we are encouraged by our recent progress, with guest spending per capita up nearly 50 percent year-to-date relative to 2019, and with attendance trends and season pass sales significantly accelerating in October and early November. We have an exciting lineup of new rides and immersive festivals planned for 2023, and we are optimistic that our momentum will continue through the upcoming season and beyond.”
Third Quarter 2022 Results
Total revenue for third quarter 2022 decreased $133 million, or 21%, compared to third quarter 2021, driven by lower attendance partially offset by higher per capita spending. The lower attendance was driven by an increase in ticket prices and elimination of free tickets and heavily-discounted product offerings.
The $8.94 increase in guest spending per capita compared to third quarter 2021 was driven by a $6.23 increase in Admissions spending per capita and a $2.71 increase in In-park spending per capita. The increase in Admissions spending per capita was primarily driven by higher realized ticket pricing and a higher mix of single day tickets. The higher In-park spending reflects the company’s in-park pricing initiatives.
The company partially offset the decrease in revenue 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 a net income of $116 million in third quarter 2022, compared to $157 million in third quarter 2021. The income per share was $1.39 compared to an income per share of $1.80 in third quarter 2021, driven by lower revenues partially offset by a reduction in expenses. Adjusted EBITDA was $226 million, a decrease of $53 million compared to third quarter 2021.
First Nine Months 2022 Results
Total revenue for the first nine months 2022 decreased $102 million, or 9%, compared to the first nine months 2021, driven by lower attendance partially offset by higher per capita spending. The lower attendance was driven by an increase in ticket prices and elimination of free tickets and heavily-discounted product offerings. In addition, due to the adoption of a fiscal reporting calendar commencing January 1, 2021, there were three fewer days in the first nine months 2022 compared to the first nine months 2021, which accounted for 89 thousand additional guests in the first nine months 2021.
The $11.39 increase in guest spending per capita compared to first nine months 2021 was driven by a $7.41 increase in Admissions spending per capita and a $3.98 increase in In-park spending per capita. The increase in Admissions spending per capita was primarily driven by higher realized ticket pricing and a higher mix of single day tickets. The higher In-park spending reflects the company’s in-park pricing initiatives.
The company partially offset the decrease in revenue 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. In addition, there were increased operating days in first half 2022 compared to the prior year period, which was negatively impacted by pandemic-related closures and operating restrictions.
The company had net income of $96 million in the first nine months 2022, compared to $132 million in the prior year period. The income per share was $1.13 compared to an income per share of $1.51 in the first nine months 2021. Adjusted EBITDA was $366 million, a decrease of $38 million compared to the first nine months 2021, driven by lower revenues partially offset by a reduction in expenses. During the second quarter 2021, the company received $11.3 million related to one of its terminated international development agreements in China. Excluding the impact of the payment, Adjusted EBITDA decreased $27 million compared to the first nine months 2021.
“We have an exciting lineup of new rides planned for 2023.” Huh? Have they announced any new rides for 2023?
Here's the number that is so telling. If you look at the October 22, 2019 PR (https://investors.sixflags.com/news-and-events/press-releases/2019/...-210441595), revenue for the first 9 months of 2019 was $1.2 billion. If you take the revenue decrease of 9% versus 2021 as being $102M, it looks like the revenue for all of 2022 this year is about 1.13 Billion, which is still down from 2019.
I understand all of the hand waiving going on, but unless Six Flags has shed some key locations since 2019, it's hard to be too excited that revenue is still down from where they were 3 years ago, especially if one compares Six Flags with Disney or Cedar Fair.
Weird thing is that the market appears to be ok with the direction. Stock is up 25% the last two days, and I doubt that's all because of the inflation news.
Disclosure: I'm long SIX.
Jeff - Editor - CoasterBuzz.com - My Blog
I’m okay with it at least, haha. I’ll gladly pay more if it means these parks are pricing out the misbehaving scumbags. Honestly if I had kids I don’t think I’d feel comfortable bringing them to these parks in the last few years.
"The term is 'amusement park.' An old Earth name for a place where people could go to see and do all sorts of fascinating things." -Spock, Stardate 3025
We've brought our kids plenty of times the last few years and had no issues. Then again we open the park and are long gone before it gets dark out.
They don’t know what direction to go. They have changed the season pass program 3 times this year. They are now just throwing ideas to the wall and trying to make them stick.
The CEO has proven that he is incompetent in the industry. A company can’t charge premium pricing with a garbage product. There has been no effort to increase the overall quality of the parks.
I priced out going to Fright Fest at SFNE this year and busted out laughing.
No grasp on realistic pricing for their product.
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