The world’s largest cinema chain confirmed this week that it is mapping out a strategic downsizing of its network of theatres. During a quarterly earnings call with its investors, AMC CFO Sean Goodman explained that every year the company has the option to renew or terminate approximately 85 leases or 10% of their network. Goodman positioned this as a “great opportunity” to close underperforming locations and shore up financial performance. And AMC is not alone, of course. The total number of locations and screens will continue to drift down in the years ahead, with more closures than new openings.
While unfortunate, AMC’s financial status makes these a necessary. Despite AMC‘s Q4 earnings beating analysts’ expectations, the company’s share price fell to an all-time low over concerns about its massive debt, incurred during an acquisition spree in the late 2010’s followed COVID shutdowns in the early 2020’s. Management has raised additional capital from public markets, most notably with the “Reddit Rallies” that were connected to a #SaveAMC social media campaign. Still, a combination of pruning out lower performing theatres together with making upgrades and investments at other locations could help the exhibitor establish a more sustainable long-term position.
Read the Screendollars Exhibition Report for real-time information on the location and screen count of AMC and other major exhibitors in the U.S. and Canada.
