July 21, 2019

For Hollywood, A Bad Summer Ahead

“Woody and Buzz Lightyear couldn’t save Hollywood from its summer slump, and movie theater chains are feeling the pressure.

Shares of AMC Entertainment (AMC) fell 5% Monday to a new all-time low, the first day of trading after the opening weekend for “Toy Story 4.” The film from Disney’s Pixar grossed nearly $120 million in US theaters this weekend — a significant amount, but still below the $140 million that Disney (DIS) and industry experts expected.

AMC is also being hurt by the fact that it is spending aggressively on theater upgrades. That, coupled with the bad box office, led to a $130.2 million loss in its most recent quarter. Analysts are expecting AMC to post a loss for all of 2019 before returning to profitability in 2020.

Weak box office numbers are also a bad sign for the industry overall. AMC rival Cinemark (CNK) and big screen operator IMAX (IMAX) each dipped more than 1% on Monday. Both stocks, while up for the year, have lagged the broader market.

Even though another Disney release — “Avengers: Endgame” — became the second-biggest global blockbuster of all time earlier this year, several other films have disappointed.
The X-Men movie “Dark Phoenix,” “Godzilla: King of the Monsters,” “Men in Black: International” and “The Secret Life of Pets 2″ have all underwhelmed at the box office.”

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