Cinemark Plans To Trim Locations While Seeking New Sites
Movie theater giant Cinemark Holdings is looking to adjust its real estate portfolio after years of turmoil in the cinema sector.
The company is in the midst of closing some theaters while adding new locations, executives at Cinemark said in the company's first-quarter earnings call May 5.
The company reported a quarterly net loss of $3.1M on $610.7M in revenue. The company said it saw a 33% rise in revenue and a 30% year-over-year rise in attendance, with 43 million moviegoers visiting its theaters worldwide in the first quarter. Cinemark runs 516 U.S. theaters and more than 5,000 globally.
Cinemark’s first-quarter loss was far below the $74M it reported losing in the fourth quarter, CoStar reported. Cinemark had two fewer theaters on its first-quarter earnings statement than it did the period before, but the company didn't comment on the theaters' locations.
“We’ve talked about optimizing our footprint, which is a combination of looking for new opportunities in existing markets or new markets as well as trimming down in areas where perhaps we have underperforming theaters,” CEO Sean Gamble said on the earnings call.
Cinemark is putting an emphasis on growing new and existing channels of revenue, which the company said included scaling up its online food ordering platform, growing merchandise sales and “increasing monetization of unused physical spaces in our theaters.” Cinemark also announced it had paid down $100M of debt in the first quarter that it had taken on during the pandemic.
Gamble said he believes the rise of streaming services is another avenue for growth, pointing to the success of streaming series that were spinoffs of movies and said the company was exploring ways to create “complementary programming that builds the pie in total.”
“There’s been a false narrative painted in the media that streaming and theatrical compete with each other, when in reality, they tend to be very complementary,” Gamble said. “And we’re not seeing any data to suggest that we’ve lost consumers and there has been slippage.”
After the pandemic threatened to bring down the curtain on many movie theater chains, the last year has been one of tumult and change in the space. Amazon is reportedly considering an acquisition of AMC Theatres, one of Cinemark's biggest rivals, which analysts said would allow Amazon to not only more effectively promote its films, but also to gather data on moviegoers and distribute goods purchased online.
Cinemark appears to be outperforming its main rivals. On the same day that Cinemark announced a $3.1M first-quarter loss, AMC Entertainment Holdings said on its earnings call that the company had lost $235.5M in the first quarter.
Cineworld, the parent company of Regal Cinemas, filed for Chapter 11 bankruptcy protection in September, facing $5B in debt and a $1B judgment against the company for backing out of a merger with the Canadian theater chain Cineplex.
