The Six Flags theme parks reported that its income dropped 36% in the second quarter of 2022, driven by a 22% decline in attendance during the three month period ending July 3, compared with the same period one year earlier.
The drop defies industry trends toward higher attendance this year when compared with the spring of 2021, when many communities were just emerging from pandemic lockdowns and many parks were operating under capacity restrictions which have since been lifted.
Six Flags reported cumulative attendance of 6.7 million visitors in Q2 2022, down from 8.5 million in the same quarter in 2021. At the same time, guest spending increased year over year, up 23% to an average of $63.87 per visitor. That increase was driven by a 27% increase in admission spending per capita, as Six Flags transitioned from open-ended memberships to fixed-length seasonal passes and more daily ticket sales.
"This is a transitional year for Six Flags, as we reset the foundations of our business model to focus on delivering a premium guest experience, while at the same time, correcting for decades of heavy price discounting," Six Flags President and CEO Selim Bassoul said. "Our guest satisfaction scores are well above 2021 and our guest spending per capita has increased more than fifty percent versus pre-pandemic levels. We believe our initial progress validates the potential of our new strategy, and provides a very healthy earnings base from which we can grow."
The company reported $435 million in total revenue for the quarter, down 5% from the previous year. Net income was $45 million, down from $71 million in Q2 2021, with an Adjusted EBITDA of $155 million for the current quarter, down 9% from the prior year.
Nevertheless, Six Flags - like Cedar Fair and SeaWorld - is continuing with a share-buyback plan, spending $96.8 million to buy back 3.5 million shares of its common stock. Six Flags plans to spend an additional $134.9 million on buybacks in the months ahead. Companies engage in stock buybacks to boost the stock price to the benefit of shareholders, including senior management.
However, it ain't working. As of posting, Six Flags shares are down 23% from the previous day's close, following today's financial report. Today's share price is down nearly 58% from Six Flags' 2022 high, posted in February.
Update: Here is the Six Flags investors call transcript, featuring plenty more from Bassoul.
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