Cinemark Holdings, Inc. (CNK) on Q1 2021 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, thank you for standing by, and welcome to Cinemark’s First Quarter Earnings Call. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Chanda Brashears, Senior Vice President of Investor Relations. Thank you. Please go ahead. Chanda Brashears: Thank you, Natalia, and good morning, everyone. At this time, I would like to welcome you to Cinemark Holdings, Inc.’s first quarter 2021 earnings release conference call, hosted by Mark Zoradi, Chief Executive Officer; and Sean Gamble, Chief Financial Officer and Chief Operating Officer. Mark Zoradi: Thank you, Chanda, and good morning, everyone. We hope you and your families have remained healthy and well during this most challenging time. We appreciate you joining us to discuss our 2021 first quarter results. Over a year has passed, since COVID-19 prompted the shutdown of our global circuit. And today I’m happy to report that we are now actively on the road to recovery. In the U.S. 98% of Cinemark theaters and 60% of the industry have reopened. As of this weekend, we’ll be operating in each of our 42 states, a first, since before the pandemic. Furthermore, government imposed capacity restrictions continue to ease as the virus is more contained. Presently, 90% of our theaters now operate with 50% or more capacity. Of course, we are mindful that many regions across the global landscape are still struggling with surging COVID cases, including India, Canada, portions of Europe and our own Latin America, where only 50% of our theaters are currently operating due to renewed government restrictions. However, we remain optimistic that like the U.S., these countries will quickly recover as lockdowns reign in the virus and vaccines start to more widely disseminate. And to that end, we are highly optimistic about the ethical exhibitions recovery over the coming months, driven by a range of factors. To begin with the COVID-19 vaccine rollout continues to progress at an aggressive pace in the U.S. For the CDC as of today, over 55% of adult Americans have received at least one vaccination and more than 40% are fully vaccinated. With the vaccine now openly available to full population ages 16 and up, these figures continue to rapidly grow each and every day. As a result of this growing vaccination penetration consumer sentiment about returning to movie theaters is improving. According to data from the National Research Group, NRG which has been tracking the consumer sentiment through weekly surveys of U.S. movie goers since the inception of COVID. 64% of respondents are now saying they are very or somewhat comfortable going to the movies. And that figure grows to an impressive 86% when respondents are asked about their comfort, once vaccinated. Sean Gamble: Thank you, Mark, and good morning, everyone. As Mark just indicated, we are thrilled to be scaling up our operations as our industry recovers, and we prepare for sizable anticipated demand with this summer upcoming lineup of new film content. Of course, while we are ramping up, we will continue to maintain a diligent focus on cash management and liquidity, some examples of ongoing actions to do so, include continuing to limit non-essential operating and capital expenditures, pursuing additional deferrals and modifications to contractual payment obligations, actively working on initiatives that will yield incremental productivity and operating efficiencies and proactively managing our debt. Operator: Your first question is from the line of Alexia Quadrani with JPMorgan. Alexia Quadrani: Thank you very much. I know the agreement that you announced today that some of the terms are being kept confidential, but I’m wondering, if there’s any more you can share with us about maybe the length of the agreement, should we assume that the studios will no longer do day and day? I mean, there’ll be an exclusive theatrical window. Anything – I guess, anything you could share with us would be great. Thank you. Mark Zoradi: Thank you, Alexia. As we mentioned, there’s five different deals here. Each one of them is different and unique. Some go for multiple months, some go for multiple years. And I can’t really go into the details of any one of the specific ones, but we’ve tried to have them be, meet the needs and the goals and objectives of that particular studio and us. It began with Universal. As I mentioned, which was completed several months ago and then over the course of the last 60 days, we’ve completed the others with the other four. But we’ve never gotten into specifics on deal terms and I feel like we can’t start at this point. Alexia Quadrani: Okay. And then just, do you think the optimism and the reopening and the current trends, which seem, relatively favorable, do you think we’re at a point now where studios have stopped shifting their movies around? And the current schedule is really set. And then just one last question, if I may, the Snacks in a Tap, is there any sense of how much savings that could potentially offer to you guys longer term? Mark Zoradi: Okay. I’m going to deal with the first question. And Sean, why don’t you deal with the Snacks in a Tap. Relative to the content lineup, I would say this. I would say that the studio lineup for the remainder of this year and into 2022 has absolutely solidified that does not mean however that there won’t be a title here or a film there that gets shifted or moved. I mean, that’s been the nature of the beast for the 30 years that I’ve been in this business. I mean, release dates always shift around and move. And in today’s environment with PVOD and streaming, it’s going to continue. But what we’ve seen is that the vast majority of these titles now look like they’re in their slot and it’s a difficult job with the studios have to do because they’ve got their master schedule and they look at it. And depending on when that movie is going to get done, is it going to be delayed? Did they have to shift? And so sometimes that causes it. And if a studio makes a shift because of a production delay, well, then it affects somebody else when they move that to another spot. So I don’t think we can assume that there’s not going to continue to be some ebbs and flow relative to the release schedule. But by and large, we feel very confident about the strength of the content for the second half of the year and leading into 2022, because there’s been so many movies that have had the delayed along the way. Studios are very anxious at this point to get them out. And they’ve all kind of locked into their key spots. Sean Gamble: And with regard to your question on Snacks in a Tap, just to start, I’d say, we’re incredibly encouraged by what we’re seeing already in the very early phases of the rollout. We look at the platform more as a revenue generator than a cost savings. I think your question was on, need do we anticipate efficiencies? If anything, the efficiency is just more on the consumer side and let taking friction out of the system that allows them to pre-order their food, allows a more speedy access to their purchases when they get into the theaters. So we look at it as a way both to drive up sell opportunities as a way to take friction out of the system for the consumers. And as a result of that, a way to further boosts our food and beverage sales, less so as cost savings opportunity. Alexia Quadrani: Thank you very much. Sean Gamble: Thanks, Alexia. Operator: Your next question is from the line of Ben Swinburne with Morgan Stanley. Ben Swinburne: Good morning. Maybe just to take another swing at Alexia’s a good question on the new agreements. I don’t know if it’s possible guys, but if you looked at 2018 and 2019 results and applied sort of these new agreements, would we notice any discernible impact? I don’t know if it’s – I don’t know, lower attendance, but higher gross margins from lower movies splits or anything that you would – when you think about the long-term impact of these agreements and how the movie business, and the terms changed post-COVID that might be material? Or maybe the answer is, you don’t and actually it all comes back to the original drivers of the business, which is content and the consumer? Mark Zoradi: Ben, thanks for the question. I think the big picture response to you there is, I wouldn’t look for any significant change relative to splits. What we tried to do with each one of these is to look at the desires of each individual studio. Each one has some various priorities in their particular business. And we try to adapt our deal with each one of them to make that work for them and for us. But at the end of the day, when we’re looking at, what do we think our film rental will be on an ongoing basis, to answer your question, I don’t think there’s going to be a material difference in how a movie would split the overall box office. There’s a little give and take here, and some ebbs and flows, but when you add it all up and you look at the portfolio of movies across all the various studio partners that we have, we tried to just customize each one of these deals to meet their needs and also meet our needs. And we think that there won’t be a material difference relative to the box office splits. Ben Swinburne: Got it. And then just a follow-up, you mentioned Mark that you think there’s potentially more to come with Netflix. Can you – what can you tell us about the keys to getting to yes, here? Is this an exclusive arrangement with the Cinemark of these wide releases, Army of the Dead that was really interesting, but maybe you could just tell us a little more about your expectations? Mark Zoradi: Well, it starts with, as you likely remember, we tested a couple of Netflix titles. Christmas Chronicles 2 was probably the largest of them late last year. And so that was the beginning of it, but those were in three, four or five market tests. The difference for Army of the Dead is, we’re doing its circuit wide, where the only one of the large three circuits that are doing this on Army of the Dead. And we anticipate this to be first of many, we have a very strong relationship both our film team with Netflix and also up through the executive ranks. And we believe that this one will be the first of many to come. Netflix has got some great movies where their filmmakers and talent want to have a theatrical exposure. And so we’re going to find a way through various testing to be able to do that. And sometimes it will be a short window, sometimes it will be a little bit longer window. But we’re able to – we’re going to find a pathway with Netflix and hopefully with other streamers as well, to be able to showcase some of the higher end product that theatrical would help show off and therefore create more value for the streamer, because it’s had a significant theatrical exposure, which clearly helps in the consumer’s mind when they’re looking at what do they want to watch. Ben Swinburne: Yes. That makes sense. Thanks so much. Operator: Your next question comes from the line of Eric Wold with B. Riley Securities. Eric Wold: Thank you. Good morning. A couple of questions, if I may, I guess one that you talked obviously about the favorable trends you’re seeing on concession purchases on the reopening. Maybe a little bit on the kind of the movie going trends, or movie going behavior, such as visitation trends during the week versus weekend shifts towards XD PLF on these films and your views on whether these trends can hold in a more fully open environment versus behaviors, kind of just in the early stages. Mark Zoradi: Ben, the thing that we found that and this wasn’t – excuse me, Eric. This wasn’t just during the pandemic. But it held true during the pandemic. And that is clearly, your Friday night and Saturday and Sunday are your best days with the exception of Tuesday. Tuesday, which has always been our discount day, continues to be a very strong day as well. So no real significant changes there. One thing that we have continued to see is that when we put on sale a movie ahead of time, especially a high profile movie, usually the first tickets that sell out the most are on XD screens. And that’s very advantageous for us and content providers, because typically we’re getting about a $3 up charge for the XDs. So the investment that we did in our 250 plus XDs around the world has clearly paid off and we think it’s going to continue. So I wouldn’t say there’s been any significant change, but it has confirmed in us that having strong XD large format screens is important. And also that we need to have significant variable pricing so that you can get your full price and maybe even a little up charge sometimes on a Friday and Saturday night, but also allow the more value-oriented consumer to be able to come for a lower price on Tuesdays. Eric Wold: Got it. And then secondly, on Latin America, obviously, struggling right now, I guess, what are your views on the timeline of Latin America, especially Brazil recovery versus the U.S., given what they’re going through. And any conversation with studios in terms of their thoughts on possibly delaying title releases down in that market greater than what they may have done previously versus in the U.S.? Sean Gamble: I’ll take that one, Eric. Yes, clearly Latin America like several other parts of the world have been struggling more on account of just not as rampant or rollout of vaccinations. We’re looking at the region is probably two to three months behind where the U.S. is right now, not too different from where they’ve been throughout a good chunk of the pandemic, just on account of the state of vaccinations is going to take a little bit of time to both bring the current issues in line and then get vaccines quickly disseminated. Good news is, the interest or the desire to get vaccinated in the region is extremely high in surveys. I think as places like the U.S. start to reach a critical mass. You’re already seeing talk of vaccines being disseminated more widely to places like Latin America. So we think it will catch up. With regard to your question on the release timings, yes, the good news is we don’t anticipate that impacting kind of global releases right now. Our releases in the U.S., however certain titles have been shifted in the region in LatAm already, so certain things like Croods which released obviously last year in the U.S. that is yet to be released in places like Brazil, Argentina, Peru, and Chile. Sing 2, which is set kind of for the end of this year, isn’t going to happen until 2022, at least at this point in LatAm. So there’s things like that that have kind of shifted. Some of that isn’t atypical, because part of that is also related to just holiday calendars and seasonality in those markets. But I do anticipate that you will see some delays in those different regions, on account of the state of the virus that may ship more than you typically see relative to the U.S. Eric Wold: Perfect. Thank you both. Operator: Your next question comes from the line of Robert Fishman with MoffettNathanson. Robert Fishman: Good morning. I’ll take another shot at the new studios agreement even understanding you can’t speak to real specifics, but should we now assume that there are terms for a full slate for each studio? Where are the terms still negotiated on a film-by-film basis? Or said differently, if a major tent-pole is currently scheduled to for a theatrical exclusive window, and that happens to switch to a day and date or earlier window release, does the studio need permission? Or is that incorporated within the framework of these deals? Mark Zoradi: Robert, again, each deal is different and unique. So it would be imprudent for me to make any overall statements. And as you know, and probably most of the people on the phone know, it’s typically we would – not typically we license movies from the studios on a studio-by-studio basis and they operate underneath an overall typically a scale deal. And depending on how that particular movie does on the scale is how we split up the box office. Now there’s some individualities on this and there’s always going to be studio-by-studio. We’re not going to go into that. It wouldn’t be appropriate for us to do that for multiple reasons. So what we’ve really done here is, in the midst of all of the changes going on all the testing of PVOD and streaming and typical and more traditional, we just solidified a deal with each one of the major studios, so that we’re confident we have a deal going forward with each one of them. The length of time on each deal varies a little bit. So again, I can’t make a blanket statement. And Sean, do you want to add something? Sean Gamble: The only thing I’d add, Robert to that is and I agree with everything Mark said, the kind of goal that anything was to provide a little bit more flexibility and have terms that kind of match that flexibility similar to a scale type structure. So I just kind of say that was, as Mark said, everything was unique, it’s different studio-by-studio, but that’s kind of one of the themes that we were aiming to achieve and in coming to benefits that are in the best interest of both the studios and Cinemark. Robert Fishman: Okay. Got it. And how should we think about the ongoing efficiencies of staffing levels and operating hours, as you’ve experimented with different outcomes there in the second half of the year, and what does it mean for margins when attendance levels go higher? Sean Gamble: Well, we’ve become very adept, not that we weren’t before the pandemic, but more so than ever at flexing our hours, flexing our staffing. It’s been one of the key focal points of our operating team during the course of the pandemic, just to get that right, to be able to operate with positive variable cash flow. So we’re going to continue to maintain that discipline as we ramp up. That’s one of the things we’re going through right now is trying to appropriately balance our staffing with – what we expect is going to be a surge of attendance coming back in. We think as Mark indicated in his prepared remarks, it’s one of the productivity initiatives we’ve been working on as a way to derive some additional margin benefits, going forward when we get to a more stabilized level it’s something we had already started working on ahead of the pandemic. And we saw early signs of benefits at that point. We think it’s going to be that much further. It can’t really put a firm number on that at this stage. But it’s definitely a part of an overall program of cost efficiencies that we’re working on. And I think we’ve developed some new controls and new techniques that are going to continue to benefit us going forward. Robert Fishman: And if I could squeeze one last one. How are you guys approaching, shutting down theaters and screens, this quarter 71 screens closed in the U.S. So just wondering how – what the strategy there is going forward on openings and closings? Mark Zoradi: Well, in terms of openings, we just opened a brand new theater last month. We’ve got another one open before the end of the year. We have four brand new theaters opening during calendar year 2021. Obviously, these were committed pre-pandemic, and we continued along the line. So, so we’re very excited about the four new theaters that we have opening. Relative to closing, we’ve closed a very small number of theaters, both domestically and internationally. It really is part of what we would do each and every year. As leases come to their conclusion maybe that we’ve had that theater for 15, 20, 25 years, they come to the conclusion. If we think that theater is at a point where it’s had most of its useful life, we won’t renew the theater. So we’ve closed less than 5% of our theaters on a worldwide basis. And in any typical year, we might close 2% or 3%. So it’s not a whole lot different than what we’ve done in any other year. This year just has slightly more, but not a material amount. Robert Fishman: Okay. Thank you both. Mark Zoradi: Thanks, Robert. Operator: Your next question is from the line of Alan Gould with Loop Capital. Alan Gould: Good morning. And thanks for taking the question. A couple here. First, I missed a little bit of Eric’s, so I hope I’m not repeating anything you said, but in terms of Disney, I see Shang-Chi on your website. I don’t see Black Widow on the website. I assume that Black Widow is covered in whatever Disney deal you have. Mark Zoradi: Yes, it is. I’d be very surprised – I haven’t looked this morning, but I’d be very surprised if it’s not. What it really comes to is, we probably haven’t – we haven’t started selling tickets yet, but in terms of our pre-awareness, we vary all kinds of titles well into the summer. So you may have seen a one screen that didn’t have it, and you look at it a day from now and it’ll be on there, but we haven’t started selling tickets yet. But that’s because Disney hasn’t allowed any exhibitors to start selling tickets yet for Black Widow. Alan Gould: Okay. And Mark, it’s nice to see the $137 million tax refund in April, it’s a big number. Is that pretty much the bulk of what we should expect for the year in terms of tax refunds? I mean, Sean, I meant. Mark Zoradi: And I’ll let Sean take that. Sean Gamble: It’s certainly the bulk of what we received last year. And then in April, we do anticipate another $30 million or so towards the end of this year related to our 2020 filings. So we think there’s a bit more refund still to come. But the bulk has been received. Alan Gould: Okay. That’s good to hear. And last thing, Mark, anything you talk about on the M&A environment? I mean, there have been some high close – high profile closures in the industry. You certainly have the liquidity. Is there any appetite for M&A? Mark Zoradi: Alan, that hasn’t changed at all. The answer to that is, yes. I think Sean and I both said in our comments that we’re continuing to be prudent relative to our liquidity and rebuilding our balance sheet. But that does not mean that we’re not looking at every potential opportunity that comes along. So, if you’ve heard about it in the marketplace, I promise you, we have to and we’re actively looking at all the potential deals. And we’re going to evaluate them with a sharp pencil, like we’ve always done and where we think it makes good long-term sense for our shareholders, then we’ll step up and potentially move forward. But there’s no mandate to go do M&A, it’s more of just opportunities as they arise. And we’re looking at every single one. Alan Gould: Thanks for taking the questions. Mark Zoradi: Thank you, Alan. Operator: Your next question is from the line of Meghan Durkin with Credit Suisse. Meghan Durkin: Hi guys. Mark, I think in your statement – your prepared remarks, you said that 64% of the theaters in the U.S. have reopened. What is your sense of where that will go over the next few months? I’m trying to get a sense of the outlook for how many screens are going to be closing permanently in the U.S. here? And then on the Netflix arrangement, I’m interested if you’re going to be the only circuit that they’re doing this with, what attracted them to Cinemark? Is it something about your footprint where Netflix penetrations are lower? Or is it your circuit because it’s just in better shape? You were going to replace all of the cameras pre-COVID. Is that something that attracted them that you’re just sort of taking care of your theaters better than your peers, your experiences better? What can you say about that? Mark Zoradi: Meghan, I’m going to take the Netflix one first. I want to make sure that I haven’t given the wrong impression. On this particular movie, we’re the only national circuit that’s doing Army of the Dead. That doesn’t mean that in the future, Netflix wouldn’t do deals with other – any other circuit across the country. So it’s only on this one particular movie. And I think the attractiveness of Netflix to us and us to them is just that we’ve been open to looking at some creative opportunities. And we started testing late last year as I mentioned. And so – but I don’t think this precludes to say that Netflix won’t do deals with other people. I think it’s likely that they would. And it’s our anticipation that we’ll continue to test with them and go forward. So it’s not an exclusive deal on a go-forward basis. It was an exclusive deal, and it’s not even exclusive, there’s lots of other exhibitors, smaller and midsize exhibitors that are also playing Army of the Dead. We just happened to be the only nationwide circuit that is playing Army. So I hope that clarifies that for you. And in regards to theater opening, I think what I said was 60% of the industry is currently open and 98% of Cinemark. Now, how far does that 60% grow to? That’s hard to say because no one has made announcements that they’re going to permanently close other than a few here and there. And even the ones that have gone into bankruptcy there’s already been a couple that have come out of bankruptcy and are operating only a portion of their theaters are not going to be opening up. So I would expect that when everything settles out, the government has come in and supported mid-size and small exhibitors with some significant financial support, I would expect that there’s going to be a lot fewer theaters closed than what one might have thought three, four or five months ago, right in the worst part of the pandemic when the smaller exhibits had not been given clarity to the financial supports that the government were going to put forward. So again, I can’t give you a number only because no one knows. We don’t know, no one else knows until in fact they don’t open up, but I think it’s not going to be a gigantic number in the United States. Meghan Durkin: Okay. Got it. Thanks. Operator: Your final question is from the line of Eric Handler with MKM Partners. Eric Handler: Good morning and thank you for the question. Couple of questions here. First, with regards to concessions, I wonder if you could talk about what’s changed on the margin now that you’ve gone completely to or mostly to prepaying in advance versus what happened pre-pandemic. Where are you seeing that people are – what are they buying now that they weren’t necessarily buying previously? And then I’ve got follow-ups. Sean Gamble: I’ll start and then maybe Mark will add some more to that, Eric. I think one of the big things Mark indicated in his prepared remarks, one of the things we think is happening and driving a lot of just the uptick in sales is people have been kind of deprived of the experience for a while, they hadn’t been back to the theaters. And when you come in, they’re kind of going all out and they want to fully indulge themselves in – as Mark said, particularly the popcorn, and everything we have to offer. If anything, from a mix difference, we’re not offering the full menu that we had before. Just to manage risks of spoilage, simplify things as we’re bringing a bunch of new employees into the theaters. So we’ve got more of our traditional core popcorn, Coke and candy concessions in the theater. So we’ve got obviously a greater mix of that. With regard to the online purchases, I wouldn’t necessarily say there’s a huge shift. If anything, again, we’re seeing incremental incidents in larger baskets. But we’re seeing that both online as well as with our in-theater purchases, so we think that again is a phenomenon of people just returning in these early days and kind of over-indexing on their consumption. We’ll see – our aim will be to continue to drive that forward on an ongoing basis. We suspect some of that will stabilize. So we think that’s really the biggest driver. And again, as I mentioned earlier, with snacks in a tap, we think we will be able to use that platform to hopefully continue to drive ongoing growth in our food and beverage sales, upsells and make it just easier for consumers with reduced lines and reduce waits and being able to reorder what they’ve done before just makes the whole process easier. And that could supplement some of the purchases with incremental buy. Mark Zoradi: I think you got it all. Eric Handler: Great. And then just two other follow-ups. First, with your subscription service, what’s the plan to reinstate that service? And what sense do you get from your prior subscribers that they’ll be coming back. And then lastly with Latin America, do you expect to get any type of government subsidies that might help you out with your cash position? Mark Zoradi: I think I’ll take Latin America one first, and then we’ll end with Movie Club. Latin America, we’ve gotten governmental support through various loans and modest subsidies. It varies by country. And so our local general managers have been extremely adept at getting the benefit of any particular loan or government assistance that they could get. And it’s been one of the reasons that we’ve been able to continue to operate there as efficiently as we could. And the one thing about Latin America as well as is that we were able to keep on board the vast majority of our employees, because the government was supportive in doing that. So that was probably one of the most significant things that we got. So relative to Movie Club, Movie Club is right now in process of what we would call kind of relaunching. We had paused all of our Movie Club memberships when pandemic was at its height. So everyone’s still remained a member, but we stopped charging everyone on a monthly basis. They could still use their benefits. They could come use the credits if they still had them. But they weren’t adding new credits and therefore they weren’t being charged a monthly $10 fee. In the coming 90 days, we’re going to do a phased approach to bring in those people off of an un-paused situation and on back to an active Movie Club membership. So what I’d say on that is stay tuned. We’ve got a very strategic and detailed plan to bring as many as possible of our 950,000 members back online and go from a pause position to an active position. And we’ll begin to do that during the month of June and forward from there. Eric Handler: Thank you very much. Mark Zoradi: Thanks, Eric. Sean Gamble: Thank you, Eric. Operator: We do have a question from the line of Jim Goss with Barrington Research. Jim Goss: Okay. Thanks for squeezing me in. Just a couple of things. One is, I’ve had some concern about the ability to have smaller films, complimenting the blockbusters. And I’m wondering if the new studio agreements and the relationship with Netflix addresses that or is that not necessarily an issue in terms of breadth of product? Mark Zoradi: Jim, thanks for the question. Specifically none of the deals deal with that. However, we think that the current environment of the way that we license movies will continue to encourage smaller films to have the opportunity to play in our screens. We’ve got a lot of screens and we have a lot of opportunity to not just play the blockbusters, but also we want to encourage smaller films. And some of these films may only play for a shortened period of time as a launch platform for their aftermarket. But no, we are going to actively look for alternative content for smaller films, for artistic films, as you remember, I’m sure we have a whole emphasis of cineart films, and many of our theaters actually specialize in that. So the commitment to the small and medium-sized films has not gone away or been diminished because of our five studio deals. Jim Goss: Okay. And maybe one just final, more broader question. I was wondering what you think would be the most striking changes post-pandemic, as they might impact your financials? Mark Zoradi: Striking change as it might impact… Jim Goss: Just in terms of – it could be just the reduced cost structure that enables you to be more profitable at lower global box office levels or anything else that you think people would notice? Mark Zoradi: Jim, I don’t think there’s one particular thing. I think we’ve hit on a number of those, whether it be Sean talking about snacks in a tap as a way to increase revenue or how I talked about some of the efficiencies that we’re looking at putting in place and that we had the opportunity to do to how aggressively we will continue to market to the consumer, both in the digital world and the social world, our Movie Club relaunch. So I don’t think there’s one particular thing that’s going to drive other than the whole accumulation of things that we talked about on this call. Jim Goss: All right. Thank you very much. Mark Zoradi: Thanks Jim. Operator: There are no further questions. I will turn the call back over to Cinemark’s for any closing remarks. Mark Zoradi: Thank you very much. We really appreciate all of you joining us this morning for our prepared remarks and the active Q&A. Thank you for that. We look forward to speaking to you all again, following our second quarter. Please all be safe, be well. Talk to you soon. Bye now. Operator: This concludes Cinemark’s first quarter earnings call. Thank you for your participation. You may now disconnect.CNK Ratings Summary
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Cinemark Holdings, Inc. (NYSE:CNK) Executive Sells Shares Amidst Rising Consumer Confidence
- Cinemark Holdings, Inc. (NYSE:CNK) sees a significant stock sale by Executive VP and General Counsel, Michael Cavalier.
- The sale occurs as consumer confidence reaches a 16-month high, positively impacting discretionary stocks like Cinemark.
- Cinemark's stock price has surged by 22% over the past month, with a P/E ratio of 17.54 and a debt-to-equity ratio of 4.59.
Cinemark Holdings, Inc. (NYSE:CNK) is a prominent player in the movie theater industry, known for its innovative theater experiences and diverse film offerings. On December 6, 2024, Michael Cavalier, the company's Executive Vice President and General Counsel, sold 2,797 shares of Cinemark's common stock at $35.19 each. Despite this sale, Cavalier still holds 329,466 shares, as reported in a Form 4 filing with the SEC.
The sale comes at a time when consumer confidence is at a 16-month high, benefiting discretionary stocks like Cinemark. This boost in confidence is linked to the positive economic outlook following the election of President-elect Donald Trump, with expectations of lower taxes and fewer regulations. As highlighted by Zacks, Cinemark, along with other discretionary stocks, has seen positive earnings estimate revisions and holds strong Zacks Ranks of #1 (Strong Buy) and #2 (Buy).
Cinemark's stock price has surged by 22% over the past month, driven by strong attendance, innovative food and beverage offerings, and strategic investments in premium theater experiences. During the Thanksgiving holiday, Cinemark achieved record-breaking results, boosting its stock by 4.4% in a single day. This performance has outpaced competitors like AMC Entertainment Holdings and The Marcus Corporation.
Financially, Cinemark has a price-to-earnings (P/E) ratio of 17.54, reflecting the market's valuation of its earnings. The price-to-sales ratio is 1.50, indicating investor willingness to pay per dollar of sales. However, the company has a high debt-to-equity ratio of 4.59, showing significant reliance on debt financing. The current ratio of 0.98 suggests that Cinemark has slightly less than enough current assets to cover its current liabilities.
