AMC Entertainment is slashing costs as the U.S. box office continues to nosedive.
The world’s largest theater chain announced on Tuesday that it plans to save $30 million by the end of the year by reducing operating hours and cutting staffing levels, among other measures. The plan went into effect this month.
The belt-tightening wasn’t enough to assuage Wall Street. Shares of AMC plummeted 27% in after-hours trading on the announcement and on weaker than anticipated second-quarter guidance. AMC doesn’t share its earnings until Aug. 7, but the company said it expects to report a loss of between $178.5 million to $174.5 million for the three-month period ending in June. That would be a sharp drop from the $24 million in profit it logged over the same time frame last year. It would also amount to a loss of between $1.36 and $1.34 a share.
Revenues are expected to top out at $1.2 billion, which would be an increase from the $764 million that AMC reported in the year-ago period. Analysts had been expecting the exhibitor to report revenues of $1.26 billion and a one cent loss.
The summer box office has been a disappointing one for exhibitors. Box office flops such as “Baywatch” and “King Arthur” have dragged down ticket sales, while hits such as “Wonder Woman” and “Guardians of the Galaxy Vol. 2” haven’t been potent enough to staunch the bleeding. Domestic revenues this summer are down 7%, while second-quarter sales in North America fell 3.3%.
Even with another “Star Wars” film hitting theaters in December and a “Thor” sequel in November, AMC isn’t expecting the box office to fully rebound. The theater chain projected that North American box office revenues will be down nearly 2% this year at $11.2 billion.