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Movie Theater Stocks Slump, Will Summer Blockbuster Season Be a Flop?
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Many movie theater companies saw their stock prices dip on Tuesday after an extremely disappointing Memorial Day weekend turnout. But does a rough holiday weekend mean that the pivotal summer movie season might be a dud?
Memorial Day Weekend
According to estimates from comScore, Memorial Day weekend domestic box office revenue dipped to its lowest level in 18 years at $176 million. The disastrous weekend numbers have sent shares of movie theater stocks down. AMC (AMC - Free Report) fell 5% to $23.45 per share on Tuesday, while IMAX (IMAX - Free Report) sunk 4.17%. Cinemark Holdings (CNK - Free Report) and Regal Entertainment Group both slipped marginally.
The much-hyped Dwayne Johnson and Zac Efron reboot of Baywatch grossed just $27.6 million domestically and less than a million internationally in its opening weekend. Alien: Covenant dropped a whopping 71% week-over-week, which marks a record second-weekend drop for a major movie over the Memorial Day holiday weekend.
Pirates of the Caribbean: Dead Men Tell No Tales pulled in only $78.2 million in the U.S. in its weekend debut. However, the movie did save itself by grabbing a total of $326 million worldwide, which includes $92.3 million in China alone. But the big worldwide boost means little to domestic movie theater giants or their stockholders.
Walt Disney (DIS - Free Report) , the company behind Pirates, is down slightly, while Baywatch maker Paramount Pictures parent Viacom (VIA - Free Report) is up marginally.
Upcoming Summer Season
According to the Los Angles Times, movie industry insiders project that ticket sales from the first weekend of May through Labor Day will fall 5% to 10% year-over-year. Last year, the summer box office season brought in $4.45 billion in the U.S. and Canada. Much of this summer’s concerns surround the constant remakes and sequels studios have relied on, along with the continued prevalence of video on demand and streaming services such as Netflix (NFLX - Free Report) .
“Some of the tent poles are just not as strong this year,” Chris Aronson, head of domestic distribution for 20th Century Fox, told the LA Times. “Pirates? It's the fifth one. Transformers? It’s the fifth one.”
The sequel year kicked off strong with The Fate of the Furious, Guardians of the Galaxy Vol. 2, and Logan. These three movies currently rank two through four, respectively, in terms of international box-office success—behind only the live-action version of Beauty and the Beast, which has brought in an impressive $1.23 billion. However, all of these films made at least 55% of their money overseas.
The upcoming summer movie season is littered with even more sequels and reboots including Transformers: The Last Knight, Spider-Man: Homecoming, War for the Planet of the Apes, and The Mummy. Theaters also hope Wonder Woman, which opens this week, will encourage fans to turn out.
Movie fans might be craving fresher options, but studios keep pumping out familiar, seemingly safe big-budget movies. The reason for studios releasing these movies could be because powerful friend-to-friend movie marketing is waning. “They don't have the word-of-mouth momentum that they once did,” Exhibitor Relations box-office analyst Jeff Bock told the LA Times. “That's been taken over by streaming shows.”
Other sequels that could gain a lot of traction at the box-office are animated juggernauts Despicable Me 3 and Cars 3. Two of the few big-time new offerings include Christopher Nolan’s World War II drama Dunkirk and the film adaptation of Stephen King’s science fantasy series The Dark Tower starring Matthew McConaughey.
If Americans stay away from movie theaters this summer at the projected rates movie studios’ bottom-lines might not be hurt since overseas markets keep booming. But U.S.-based movie theater chains will suffer if the remaining summer movie offerings don’t get people into the seats.
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Movie Theater Stocks Slump, Will Summer Blockbuster Season Be a Flop?
Many movie theater companies saw their stock prices dip on Tuesday after an extremely disappointing Memorial Day weekend turnout. But does a rough holiday weekend mean that the pivotal summer movie season might be a dud?
Memorial Day Weekend
According to estimates from comScore, Memorial Day weekend domestic box office revenue dipped to its lowest level in 18 years at $176 million. The disastrous weekend numbers have sent shares of movie theater stocks down. AMC (AMC - Free Report) fell 5% to $23.45 per share on Tuesday, while IMAX (IMAX - Free Report) sunk 4.17%. Cinemark Holdings (CNK - Free Report) and Regal Entertainment Group both slipped marginally.
The much-hyped Dwayne Johnson and Zac Efron reboot of Baywatch grossed just $27.6 million domestically and less than a million internationally in its opening weekend. Alien: Covenant dropped a whopping 71% week-over-week, which marks a record second-weekend drop for a major movie over the Memorial Day holiday weekend.
Pirates of the Caribbean: Dead Men Tell No Tales pulled in only $78.2 million in the U.S. in its weekend debut. However, the movie did save itself by grabbing a total of $326 million worldwide, which includes $92.3 million in China alone. But the big worldwide boost means little to domestic movie theater giants or their stockholders.
Walt Disney (DIS - Free Report) , the company behind Pirates, is down slightly, while Baywatch maker Paramount Pictures parent Viacom (VIA - Free Report) is up marginally.
Upcoming Summer Season
According to the Los Angles Times, movie industry insiders project that ticket sales from the first weekend of May through Labor Day will fall 5% to 10% year-over-year. Last year, the summer box office season brought in $4.45 billion in the U.S. and Canada. Much of this summer’s concerns surround the constant remakes and sequels studios have relied on, along with the continued prevalence of video on demand and streaming services such as Netflix (NFLX - Free Report) .
“Some of the tent poles are just not as strong this year,” Chris Aronson, head of domestic distribution for 20th Century Fox, told the LA Times. “Pirates? It's the fifth one. Transformers? It’s the fifth one.”
The sequel year kicked off strong with The Fate of the Furious, Guardians of the Galaxy Vol. 2, and Logan. These three movies currently rank two through four, respectively, in terms of international box-office success—behind only the live-action version of Beauty and the Beast, which has brought in an impressive $1.23 billion. However, all of these films made at least 55% of their money overseas.
The upcoming summer movie season is littered with even more sequels and reboots including Transformers: The Last Knight, Spider-Man: Homecoming, War for the Planet of the Apes, and The Mummy. Theaters also hope Wonder Woman, which opens this week, will encourage fans to turn out.
Movie fans might be craving fresher options, but studios keep pumping out familiar, seemingly safe big-budget movies. The reason for studios releasing these movies could be because powerful friend-to-friend movie marketing is waning. “They don't have the word-of-mouth momentum that they once did,” Exhibitor Relations box-office analyst Jeff Bock told the LA Times. “That's been taken over by streaming shows.”
Other sequels that could gain a lot of traction at the box-office are animated juggernauts Despicable Me 3 and Cars 3. Two of the few big-time new offerings include Christopher Nolan’s World War II drama Dunkirk and the film adaptation of Stephen King’s science fantasy series The Dark Tower starring Matthew McConaughey.
If Americans stay away from movie theaters this summer at the projected rates movie studios’ bottom-lines might not be hurt since overseas markets keep booming. But U.S.-based movie theater chains will suffer if the remaining summer movie offerings don’t get people into the seats.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade, which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>