The rapid decline of Six Flags
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It's all fun and games until the earnings reports come out. Photo: Brandon Wade/Fort Worth Star-Telegram/Tribune News Service via Getty Images
Arlington-based Six Flags Entertainment has had a painful ride this year. Even as other theme parks rebounded from the pandemic downturn, revenue and attendance at parks owned by Six Flags are way down compared with 2021, according to the company's third quarter earnings report.
Why it matters: Six Flags is one of the world's largest theme park companies and the largest operator of waterparks in North America. The flagship Arlington location is a staple of the North Texas entertainment industry.
The big picture: In August, CEO Selim Bassoul announced a new strategy that would raise prices and lower overall attendance and wait times. That would, in theory, increase customer satisfaction and decrease the number of employees needed.
- Bassoul said the parks had become "a day care center for teenagers."
By the numbers: In the third quarter of 2022, which included the usually lucrative summer months, the company's revenue was down 21% compared with the same period in 2021, per the earnings report.
- Attendance across the company's parks dropped a whopping 33% compared to 2021.
- Average parkgoer spending went up 12%, but that didn't come close to offsetting the losses in attendance.
Context: Over the first 10 months of 2022, Ohio-based Cedar Fair Entertainment, which also operates ride-centric theme parks, brought in nearly $475 million more in revenue than during the same period in 2021 and had 7.5 million more visitors — despite operating fewer parks.
Reality check: Despite tempered expectations, Six Flags revenue still missed analyst estimates by 8.2%.
Yes, but: Six Flags share prices still went up after the earnings report was released, largely because the investment firm H Partners, which owned 15% of the company's stock, increased its ownership stake to 20%.
What they're saying: "This was a year of transition for Six Flags, as we made bold changes to our business model in order to elevate the guest experience and to position the company for sustainable, long-term earnings growth," Bassoul said during the earnings call.
- "While it will take time to achieve our ambitious goals, we are encouraged by our recent progress."