Six Flags revenue down 5% for the quarter compared to last year

Here's the table from the release:

That's a massive attendance slide. Did they just stop advertising? Or maybe guests just didn't come back after a crappy experience? It's very telling that they're not even bothering to compare to 2019 numbers... $477 million in revenue, and "second quarter 2019 attendance grew by 538,000 guests or 6 percent," which I think the math says that's 8.9 million visitors. That's a seriously epic decline.

Fun:

The 2019 Q2 YTD attendance was 12.7m.

Todays numbers represent a 47% decrease...

You're confusing first half and second quarter. It's Q2 or YTD, it can't be both.

Note ideal for comparison (Second Qtr 2019 from https://investors.sixflags.com/news-and-events/press-releases/2019/...-110127186)
Total Revenue: $477 million
Net Income Attributable to Six Flags Entertainment: (I'm not seeing this in the release)
Net Income per share: $0.94
Adjusted EBITDA: $180 million
Attendance: 10.5 Million
Total Guest Spending Per Capita: $42.27
Admissions Spending Per Capita: $24.03
In-Park Spending Per Capita: $18.24

Basically, revenue down 8.8% versus 2019, net income per share down by 43.6%, EBITDA down 13.8%, attendance down 36%, percapita spending up by 51%...

Overall, this may explain why the stock was down 18% today, and also doesn't bode well given the exciting announcements about all the Cedar Fair parks today...

They mention lower advertising costs, which probably didn't help.

I live in the Los Angeles metro market, and haven't heard a Six Flags ad since Spring Break week.

I saw television coverage of the new RMC Wonder Woman ride at SFMM when it opened, but nothing pre-or post. I'm waiting for them to yank me on my Super Diamond Ultra Deluxe VIP with Cheese membership. I've used it mostly at other parks the past year, but had hoped to get to SFMM soon. As soon as they eff with it, it will be the last pass I get from them for many a year.

I'm all for improving the guest experience, specifically if that means higher cost, yet lower crowds, improved F&B. Typically lower crowds at SFMM just means fewer food stands open and now the entire park is waiting in line at one of the only three places in the park to get food. And then the food sucks.

My only regret is that I didn't buy a boatload of Puts yesterday as we all saw horrible news coming. ARGH!

Walt S:

Overall, this may explain why the stock was down 18% today, and also doesn't bode well given the exciting announcements about all the Cedar Fair parks today.

I'm sure there's a joke about Michigan's Adventure or Dorney Park in there somewhere. The fact that Cedar Fair is committing to seasonal park events stands way ahead of Six Flags committing to maybe open next year.

CreditWh0re:
I'm waiting for them to yank me on my Super Diamond Ultra Deluxe VIP with Cheese membership. I've used it mostly at other parks the past year, but had hoped to get to SFMM soon. As soon as they eff with it, it will be the last pass I get from them for many a year.

I'm waiting for them to pull memberships too. That'll definitely push us to a Cedar Fair Platinum Pass, even though the nearest park is 4 hours away.

Rumor on the interwebs is those with legacy memberships are seeing a higher amount taken for their monthly payment against the contract they signed. Not sure if this is legit or just a few people on the internet looking to create a story.

Also, I usually dislike the Post, but this seems to stick to the facts and the hyperbolic headline is a quote from the CEO

https://nypost.com/2022/08/11/six-flags-ceo-we-became-a-cheap-day-c...teenagers/

We can probably go back at least 20 years to find Gonch complaining about Six Flags giving away the gate way back then. The problem with how they're doing it is that Bassoul wants to be Disney and has raised the prices accordingly, but he doesn't want to spend the money to improve the guest experience. "Gate Price" at Magic Mountain is now $120, the "online deal" price for weekends is $95. My first Gold pass 6 years ago was like $70 and included parking (now $40/day) and 15 months of admission to both LA parks and every other Six Flags. That pass is $252 now. You can't triple the price of something and pretend like it's now premium without actually, you know, providing a premium product. I love my home park coaster collection at SFMM but the facilities and operations are still severely lacking, the only parts of the park that look "good" are the ones that are designed to look like they're falling apart or the parts that are brand new. Not counting that part that is literally themed to look like a Los Angeles parking lot.

Meanwhile the stock is down 50% since Bassoul made CEO while FUN is only down 10%. SIX is over 70% off its all time high. I was looking at the board makeup and the entire board was replaced in 2020, so they are all in on it. If things keep going as badly as they are headed it's going to take a shareholder revolution or another Snyder/Shapiro style financial meltdown to wipe the slate clean.

BrettV:

Rumor on the interwebs is those with legacy memberships are seeing a higher amount taken for their monthly payment against the contract they signed. Not sure if this is legit or just a few people on the internet looking to create a story.

I've been charged the same amount.

“So, we only got the discounter or we became a day care center for teenagers...”

That's hardly a new development at some of the parks. But if you wanna charge more, the product has to improve or the demand has to justify it. They're seeing some modest improvement in per capita spending, but they haven't done anything to bring people back.

I know near nothing about park finances, earnings reports, and the like. Maybe someone can shed some light on some questions related to season and dining passes. How exactly do they account for those in per capita spending?

If someone had the dining pass last year when exactly does that get counted as spending? When they buy the pass? Purchase a meal at the park, even though it's already been paid for?

Now that Six Flags has the dining packs does that count towards spending when the pack is purchased or when the meals are redeemed?

How much does my one visit on my membership this year count towards admission spending per capita? What if I visited 10 times?

Well, SIX has officially passed FUN in per capita spending… $63.87 vs $59.62. Lower attendance. Selim’s pals like “the Los Ángeles Park”. It’s working like a charm and my family will be priced out!

I find this statement a bit interesting: "Our guest satisfaction scores are well above 2021" I'm curious as to who is being surveyed on that one, as I certainly have not been getting the surveys I used to from my visits. And, when visiting this summer, I can't say my satisfaction was higher than in the past. Visiting 3 parks on vacation (Kings Island, Dollywood, and Six Flags St. Louis) with each visit being a on day with a heat index of nearly 100. At Kings Island and Dollywood, nearly every ride op was adding to the spiel "stop by any drink stand for a cup of ice water." At Six Flags St. Louis, good luck finding an open drink stand to refill your cup, as the food vendors were alternating between food service and ride operation.

Looking at the math, this might not be too bad.

Per cap is $63.87 vs. $51.94. If the attendance drop is at the "good" end of the range (20%), they generate total revenue close to a per-cap of about $51.10 at the "old" attendance number. But, they also have 20% fewer guests to deal with, which should reduce some costs. And, those guests are in a less-busy park, so it is plausible that guest satisfaction scores are up.

They might have done it too quickly, but the doing of it doesn't seem like a terrible idea.

You highlight a critical challenge though- they dropped 36% compared to 2019, not 20%. So they've got to recoup 16% or some 2 million visits, and their plan to do so is through infrastructure improvements and better customer service. I just don't see that happening.

If someone had the dining pass last year when exactly does that get counted as spending?

From the Six Flags 2021 annual report (under section titled Revenue Recognition):

For season passes, memberships in the initial twelve-month term and other multi-use admissions, we estimate a redemption rate based on historical experience and other factors and assumptions we believe to be customary and reasonable and recognize a pro-rata portion of the revenue as the guest attends our parks. For any bundled products with multiple performance obligations, revenue is allocated using the retail price of each distinct performance obligation and products that are not sold on a stand-alone basis are treated as residual. In contrast to our season pass and other multi-use offerings (such as our all season dining pass program, which enables season pass holders and members to eat meals and snacks any day they visit the park for one upfront payment) that expire at the end of each operating season, the membership program continues on a month-to-month basis after the initial twelve-month membership term and can be canceled any time after the initial term pursuant to the terms of the membership program. Guests enrolled in the membership program can visit our parks an unlimited number of times anytime the parks are open as long as the guest remains enrolled in the membership program. We review the estimated redemption rate on an ongoing basis and revise it as necessary throughout the year, including impact of changes to our season pass and memberships described above. Amounts owed or received for multiuse admissions in excess of redemptions are recognized in deferred revenue. For active memberships after the initial twelve-month term, we recognize revenue monthly as payments are received.

So for the first 12 months, they look at the expected number of uses and recognize income on a pro rata basis. So if they expect the average guest to use an annual pass 5 times, you recognize 20% of the season pass cost with each visit (more than 5 visits do not result in more revenue recognized that what was paid for the pass and if you do not visit 5 times, any remaining unrecognized revenue would be recognized in the last quarter).

With bundled products (such as admissions pass that comes with drink plan -- don't know if they offer that just using as an example), they look at the relative retail cost of each and allocate revenue based on relative retail price of each (so if admission ticket is 2x cost of drink plan, 2/3rds of revenue from sale of bundled product goes to admission and 1/3rd goes to food/drink).

After the 12 month period for a membership, they recognize revenue in the month the payment is received (so at that point they are not looking at expected number of visits).

Thanks that helps. But as always brings up more questions. We've been members for three years now, so we are way past that 12 month window. Based on what you posted my visit would either count as $0 per capita in admissions, The $6 I spent that month on my membership, or they would just ignore it in their calculation. Either way it seems like the admission cost per capita is being artificially inflated as people transition to season passes from memberships. I'm curious how season pass sales compare to previous years.

Similarly I wouldn't be surprised if in park spending isn't really up but appears that way based on the sunsetting of the all season dining plan. There are no more discounted meals, unless you include the dining packs which are priced at $40 for 4 meals.

Side note: Through last year Six Flags offered four different options for all-day / all-season drinks. Certain tiers of membership include a bottle. The premium all-season dining included a bottle. You can also purchase an all-season or all-day drink bottle in the park. And yes, all of these bottles were different. Here we thought Genie+ was complicated!

I don't think it's so hard to imagine that the per-caps are genuinely higher at SIX. They seem to be up everywhere else.

At the very least, you would expect them to match inflation.