AMC Theatres announced a new line of AMC-branded popcorns sold exclusively at Walmart, and CEO Adam Aron wants you to know he’s really excited about it. So excited that he devoted a large chunk of time during the theater chain’s earnings call Tuesday to tell you all about the buttery goodness coming soon to a store near you.
It wasn’t just a line item during prepared marks. In a call that went long and was limited to just one live question from an analyst, Aron instead took undisclosed shareholder questions and went above and beyond this morning’s press release in explaining how much excitement there is for AMC popcorn you can eat at home.
“Yes, the enthusiasm and excitement for AMC Perfectly Popcorn at home is real. I see it on Twitter,” Aron said. “When I look at the readership of the tweets I’ve been putting out recently on popcorn, they’re sky high. The likes are sky high, the retweets are sky high, the comments back to me, every single one of which I read by the way, I got like 45,000 inbound messages on the popcorn tweets recently and I read them all. Boy they make me excited, because you’re excited about it.”
For the one analyst who did get a question in, Aron briefly cut him off to expound on the popcorn flavor profiles. (They’re Classic Butter, Extra Butter, and Lightly Salted.)
“Not to interrupt, but you know what you’re going to like more than how we report the popcorn results? Eating the popcorn. It’s really good. We actually worked for a full year on the flavor profile of these products. It’s really great,” he said.
In truth, it could be a good way for AMC to generate additional revenue when it’s needed most. But Aron was really excited about getting into the at-home popcorn business, calling it a potentially “multi-billion dollar” market, and teased it could one day be sold in theaters or even internationally under the Odeon Cinemas brand.
“It’s all new, we haven’t started it yet, and the interest level is very high. This is a very nice position to be in when you’re launching a new product,” he said. “Let’s put it this way, we’re setting up our production plants to make millions of bags and microwave packs of popcorn. We think this is a big opportunity for us.”
Never mind that AMC Entertainment lost another $287.7 million this past quarter, bringing its net losses for the year to $973 million. Or that it still has nearly $5 billion worth of debt. Or that analyst forecasts for AMC remain bleak. Wedbush gave AMC Entertainment a target stock price of just $2 in a report on Monday ahead of earnings. The stock closed at $7.14 on Tuesday. That stock price comes after a 23 percent surge on Monday, though not because of popcorn sales.
Getty Images for CinemaCon
Aron didn’t only talk about popcorn (both in its pre-popped and microwave varieties, adding that the Extra Butter flavor comes with “six packets of additional buttery topping that eaters at home can use to slather all over their popcorn”). He also urged shareholders to vote to approve the conversion of its AMC Preferred Equity stock, or APE shares, to common stock, through a reverse stock swap.
AMC’s APE shares, named for the people who helped make AMC Entertainment into a meme stock, are effectively the same as common stock and have been a way for the company to raise cash and reduce its debt. So far, the shares raised $314 million and reduced AMC’s debt by $390 million since the start of 2022. However, for a variety of reasons, APE shares have been trading for far less than AMC shares, something that Aron said was ridiculous.
“I believe that there is no compelling argument that our shareholders should be averse to a reverse stock split,” he said. “Were we to be somehow deprived of this… our future could turn quite bleak in the blink of an eye… our success could literally vaporize in an instant.”
That meeting to vote on the stock swap is scheduled for March 14. Even if it passes, it hit a snag Monday when a judge approved an injunction request and set a hearing for April 27 after some shareholders sued, accusing the company of eroding their voting power. That hearing is what caused the AMC proper stock to surge Monday, but Aron remained encouraged that the court allowed the vote to continue. He called the lawsuit “misguided” and said the company would “defend it vigorously.”
Aron also gave an outlook on the 2023 box office. While he acknowledged that full recovery to pre-pandemic norms won’t come until 2024 or 2025 at the earliest, as many as 75 percent more movies will hit screens in 2023. He said he believes as many as 30 movies this year could top $100 million at the domestic box office.
There was also the new Sightline policy, which raises the prices for the best seats in the house while offering a discount in case you feel like sitting in the front row. Aron stressed that Sightline remains a test case in the hopes that they can roll it out nationwide later this year. He even speculated that down the road, if AMC felt the need to raise movie ticket prices, there’s a chance they could jack up prices only in the premium seats and leave the rest of the house at the old prices.
“We do understand, however, this is a a substantial change in the status quo for moviegoers, so we will be watching very closely,” he said.
AMC did outperform average market expectations in Q4, posting revenue of $990.9 million for the quarter compared to Wall Street estimates of $977.6 million, as well as earnings per share of -$.14 compared to estimates that pegged losses of $.21. An additional boon should come next quarter, where “Avatar: The Way of Water” made a solid chunk of its money. AMC has a particularly high market share of theaters for the film because so much of the viewing skewed toward AMC’s many IMAX and other premium large format screens.
Additional reporting by Wilson Chapman.
Sign Up: Stay on top of the latest breaking film and TV news! Sign up for our Email Newsletters here.