Wanted to get something up on this before tomorrows open since I’ve been seeing more about it on the news, but Sox Flags ($SIX)is in hot water.
First let’s start with the Financials
The company reported $0.53 earnings per share for the quarter, missing the consensus estimate of $1.01 by ($0.48). The company had revenue of $435.40 million for the quarter, compared to the consensus estimate of $518.50 million. Six Flags Entertainment had a net margin of 8.83% and a negative return on equity of 14.53%. Six Flags Entertainment’s quarterly revenue was down 5.3% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.81 EPS.
The quarter also a $5M reduction in sponsorship, international agreements and accommodations revenue.
Attendance fell 22% in the second quarter from a year ago, even as other theme-park operators have seen visits nearly return to prepandemic levels.The decrease in attendance was partially offset by guest spending per capita increasing 23% to $63.87. Admissions spending per capita was up 27% to $36.35 and in-park spending per capita rose 18% to $27.52.
CEO and President Selim Bassoul, who was appointed in November after serving on the Texas-based company’s board, attributed the decline to the elimination of ticket discounts and other programs such as the parks’ unlimited meal plan. In doing that, the company is attempting to lower the number of people in its parks and change its main customer base.
“We had discounted too much and the philosophy of filling our parks was not the right strategy. At the end, all we’re doing, people did not have a good experience,” Bassoul said on an earnings call Thursday. “So we only got the discounter or we became a daycare center for teenagers. It was a cheap daycare center for teenagers during breaks and the summers.”
These earnings also followed a shooting at six flags great America in Illinois where 3 people were injured.
Now there is a new incident where 13 people were injured on their famed “El Toro” wooden rollercoaster. Employees have been reporting to the media that Six Flags has known about these issues and has not bothered to try to fix them.
I personally have thought for awhile that Six Flags doesn’t have the mojo anymore, no real incentives for kids to want to go, and will never see the crowds that they saw 5-10 years ago. With the incidents in the news, pandemic and all the fear based news of sickness etc, Inflation, the economy, and places like Disneyland making big incentives for people to want to go there vs a place with lame and/or Dangerous rides, I can see Six Flags becoming a place in history.
My position 10 @ 10/21 $20p