Though fluctuation is something we’ve come to expect when it comes to theme parks, it looks like things at regional amusement park chain Six Flags are not going well, according to a recent earnings report. And unfortunately, Wall Street has reacted very poorly to this news, which is fueling speculation that Six Flags could once again be looking for a buyer…
Attendance and revenue are down in a BIG way
According to official filings, attendance declined year over year at Six Flags’ theme parks in the fourth quarter of 2019, and revenue from park admissions fell about 5 percent year-over-year to $144.5 million during this period. In addition total revenues dropped about 3.1 percent to $261 million.
Unfortunately, even guests who do visit the park are spending less, as per capita guest spending fell $0.21 to $42.37 in 2019. Of that, $24.86 was for admissions (a $0.44 decrease from 2018) and $17.51 was for in-park spending (up $0.23 from the prior year).
The China expansion problem
Unfortunately, Six Flags’ troubles don’t just extend from poor performance in North America, as last year the company’s partner in China defaulted on its payment obligations and the company was forced to terminate its development agreements, resulting in a loss of about $10 Million.
Wall Street is not reacting well to all this bad news
Sadly, Six Flags’ stock took an immediate plunge Thursday after the amusement park chain’s report, with shares opening 20 percent lower than the previous day, and then plunging as much as 37% during the day. And unfortunately, things are not looking like they are rebounding in the near future. However, an old rumor has resurfaced about the future of Six Flags as a whole…
Could a Cedar Fair merger be back on the table?
Late last year it was reported that Six Flags Entertainment was making an offer to buy Cedar Fair in a massive deal said to be valued at $4 Billion. Of course, that deal never came to pass, but a lot has changed since this rumor first appeared, with results at Cedar Fair not exactly impressing in 2019 either.
And since things at Cedar Fair aren’t as dire as they are at Six Flags, some have speculated that Cedar Fair could return to the negotiating table, this time as the one making the buyout offer for Six Flags.
Though things look bad right now for Six Flags, it’s not quite past the point of no return. SeaWorld has famously made a big comeback since taking massive attendance and revenue hits in the wake of several scandals at the beginning of the last decade, and its not unreasonable to think that Six Flags can do the same. Of course, Six Flags has a LOT more parks than SeaWorld, and their plans for international expansion are far more substantial, but hopefully with new leadership on the way, Six Flags can work on bringing more guests to their parks, raising revenue, and getting back on track, long-term.
