Stronger concessions sales and an increase in admissions pushed third quarter earnings at Regal Entertainment Group past Wall Street’s projections.
Revenue at the Knoxville, Tenn. company jumped more than 4% to $725 million, even as next income fell from $26.7 million in the year-ago period to $21.9 million. Earnings per share was flat at 18 cents. Analysts had predicted that Regal would post earnings of 15 cents a share and revenue of $716.9 million.
In addition, the company declared a cash dividend of 22 cents a share.
Much of the growth was attributable to a rise in popcorn, soda and other snack sales. Regal, like many other exhibitors, has invested heavily in improving its amenities. It has been offering alcohol and higher-end appetizers in certain locations. The bet seemed to be paying off, as concession revenue increased from $194.5 million to $214.7 million and the average concessions spend per patron rose nearly 10% to $4.20.
Attendance also spiked at Regal locations. Ticket sales moved from $461.1 million to $469.9 million. It was a three-month period that included the release of hits like “Straight Outta Compton” and “Mission: Impossible — Rogue Nation.”
In a call with analysts, Regal CEO Amy Miles said the company was open to experimenting with distribution windows, but noted that any deal had to make financial sense. Regal was one of the major theater chains that opted not to screen “Paranormal Activity: The Ghost Dimension” and next weekend’s “Scouts Guide to Zombie Apocalypse” after distributor Paramount announced a plan to debut the pictures on home entertainment early.
In exchange for letting the studio unveil the films digitally 17 days after they leave theaters exhibitors were given a cut of home entertainment revenue. Typically a studio has to wait 90 days between a film’s theatrical debut and its home entertainment launch.
The latest “Paranormal” earned less than $9 million in its first weekend, but it debuted on 1,000 fewer screens than the previous film in the series. Miles said that it was “…hard to evaluate any meaningful results from the test,” because it was unclear how to account for the lower screen count.
Shares of Regal closed Tuesday down 2.66% to $18.64.