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Six Flags noticed a $5 million discount in sponsorship, worldwide agreements, and lodging income within the newest quarter.
AFP by way of Getty Photographs
Six Flags Entertainment
inventory dived Thursday after the theme park operator reported a fall in income as fewer folks visited its parks this summer time.
The corporate reported earnings of 53 cents a share for the second quarter, virtually half of the consensus name of $1.01 per share amongst analysts tracked by
FactSet
.
Income of $435 million decreased 5% yr over yr and fell wanting estimates of $518.5 million.
Six Flags mentioned a lower in attendance and a $5 million discount in sponsorship, worldwide agreements, and lodging income affected gross sales.
The inventory (ticker: SIX) tumbled 13% to $22.49 on the information in premarket buying and selling Thursday.
Attendance had understandably dipped in the course of the first yr of the pandemic. Solely 433,000 visited the few reopened parks within the second quarter of 2020 versus 10.5 million within the comparable prepandemic quarter. Gross sales slipped 96% yr over yr within the second quarter of 2020 from a yr earlier, and Six Flags warned of a potential cash crunch if operations considerably diminished in 2021.
Fortunately the pandemic scenario improved, and the company made a strong comebacokay. Attendance accelerated to eight.5 million within the second quarter of 2021. The most recent report, with attendance of 6.7 million within the 2022 second quarter, suggests visitor visits are slowing once more, however CEO Selim Bassoul has a purpose.
“This can be a transitional yr for Six Flags, as we reset the foundations of our enterprise mannequin to give attention to delivering a premium visitor expertise, whereas on the similar time, correcting for many years of heavy value discounting,” Bassoul mentioned within the earnings launch.
Six Flags has been making an attempt to give attention to visitors that may spend extra. Bassoul, appointed late final yr, believes the corporate’s historic reliance on heavy discounting wasn’t the fitting technique.
“Company who got here on closely discounted or free tickets prepandemic didn’t spend a lot time within the park, but they used up our park capability,” he mentioned in an earnings name in February.
That transfer away from low-cost season passes and free tickets is seen on this quarter’s outcomes. Six Flags’ whole visitor spending per capita elevated to $63.87 from $51.94 within the year-earlier quarter. The corporate mentioned its visitor spending per capita has elevated greater than 50% versus prepandemic ranges.
Six Flags has been shaking issues up for some time now. The North American water park operator abruptly replaced its CEO Mike Spanos in November final yr. Just a few months later, Chief Monetary Officer, Sandeep Reddy, determined to step down from his place.
Three out of 13 analysts fee the inventory as Impartial, whereas 10 fee it as Purchase.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com