AMC earnings call Q3 2023: Investor summary
📈 Key Points for Investors
- Record-Setting Financial Performance: AMC's Q3 2023 financial results were historically high, surpassing not just the previous year but all third quarters in the company's 103-year history, with revenues exceeding $1.4 billion, adjusted EBITDA of $194 million, and a positive net income of $12 million.
- Robust Attendance and Revenue Growth: The company witnessed a global attendance of over 73.4 million guests, a 38.4% increase from the previous year, and a revenue increase of 45.2% to $1.4 billion.
- Strong Cash Position: AMC ended the quarter with $730 million in cash, focusing on maintaining robust cash reserves.
- Improved Contribution Per Patron: AMC reported a 30% increase in contribution per patron compared to pre-pandemic levels, indicating enhanced profitability even without full return to pre-pandemic box office levels.
- Strategic Business Initiatives: AMC's success attributed to effective expense management, pruning of theater fleet, renegotiation of theater rents, and innovative marketing, including merchandise sales and food and beverage initiatives.
- Exciting Future Prospects: The company anticipates further growth with initiatives like distributing concert films (e.g., Taylor Swift, Beyoncé), expanding premium large format screens, and introducing new F&B products.
🤔 What Should Investors with this Stock Do
- Stay Invested for Long-Term Growth: Given AMC's strong performance and strategic initiatives, investors should consider holding their shares to benefit from the company's potential long-term growth.
- Monitor Cash Reserves and Debt Reduction: While AMC's current cash position is strong, investors should keep an eye on the company's efforts in managing its liquidity and reducing debt, which are critical for sustained growth.
- Watch for Expansion in New Ventures: The company's foray into concert film distribution and new F&B products could open additional revenue streams. Investors should watch these developments for potential impact on AMC's profitability.
- Be Cautious of External Factors: Keep an eye on external factors like the ongoing Hollywood strikes and macroeconomic changes that could impact AMC's performance in the short term.
- Consider Diversification within the Sector: While AMC shows promise, investors might benefit from diversifying their portfolio within the entertainment and cinema sector to mitigate risks associated with relying on a single company.
AMC earnings call full transcript Q3 2023
- John Merriwether – VP of IR
- Adam Aron – Chairman, President & CEO
- Sean Goodman – EVP of International Operations and CFO
Conference Call Participants
- Alicia Reese – Wedbush Securities
Good afternoon, ladies and gentlemen, and welcome to the AMC Entertainment Third Quarter 2023 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for a question. [Operator Instructions].
I would now like to turn the conference over to John Merriwether. Please go ahead, sir.
Thank you, Jenny. Good afternoon. I'd like to welcome everyone to AMC's third quarter 2023 earnings webcast. With me this afternoon is Adam Aaron, our Chairman and CEO and Sean Goodman, our Chief Financial Officer.
Before I turn the webcast over to Adam, let me remind everyone that some of the comments made by management during this webcast may contain forward-looking statements that are based on management's current expectations. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those that might be expressed today.
Many of these risks and uncertainties are discussed in our most recent public filings, including our most recently filed 10-K and 10-Q. Several of the factors that will determine a company's future results are beyond the ability of the company to control or predict. In light of the uncertainties inherent in any forward-looking statements, listeners are cautioned against relying on the statements. The company undertakes no obligation to revise or update any forward-looking statements whether as a result of new information or future events.
On this webcast, we may reference non-GAAP financial measures such as adjusted EBITDA constant currency free cash flow, operating cash burn, operating cash generated, among others. For a full reconciliation of our non-GAAP measures to GAAP results, please see our earnings released posted in the Investor Relations section of our website earlier this afternoon.
After our prepared remarks, there will be a question-and-answer session. This afternoon's webcast is being recorded and a replay will be available in the investor relations section of our website at amctheaters.com later today.
With that, I'll turn the call over to Adam.
Thank you, John. Good afternoon, everyone, and thank you for joining us today. It's almost impossible to contain our pride, as the record setting strength of AMC's third quarter 2023 financial results. Press on the heels of our recent record Q2 results, we set the bar even higher in Q3. For both revenue and adjusted EBITDA, these were the single best third quarter results in AMC's entire 103-year history.
By definition, revenue and adjusted EBITDA beat last year's third quarter. They beat the third quarter of 2019, which was the last Q3 unaffected by the COVID-19 pandemic. And for that matter, they beat every third quarter results that AMC has ever reported. Once again, AMC exceeded consensus estimates and market expectations across the board, and we did so handily.
AMC was literally in a different ballpark of accomplishment than many third-party observers anticipated. Sean will discuss these exceptional third quarter results in more detail during his prepared remarks. But suffice it to say, AMC is posting revenues exceeding $1.4 billion, adjusted EBITDA of $194 million and positive net income of $12 million is a feat that has us all smiling in Leawood, Kansas.
The entire quarter was rejuvenating for AMC, and July especially was meaningful, as it was the second highest grossing month in AMC's entire century-long history. Global attendance at AMC Theaters tallied more than 73.4 million guests in the third quarter of 2023, up 38.4% over the third quarter of the prior year. It set a high watermark for quarterly attendance in the post-pandemic era. AMC's attendance in Q3 2023 was the highest since the fourth quarter of 2019.
Movie goers returned to AMC theaters and ever increasing numbers in the third quarter of 2023 in response to both our studio partners' efforts to increase the quantity and quality of new releases. Combined with AMC's continuing commitment to enhancing the guest experience, enjoyed at our theatres.
This continuance of AMC has been on a glide path to recovery is notable for three key aspects. First, the industry wide box office is finally showing some strength. Second, we ended the quarter with $730 million of cash and we remain committed to ensuring that our cash reserves remain robust. And third, AMC's contribution per patron was up 30% from pre-pandemic norms. I want to repeat that number for emphasis, so that you all hear it and understand its significance.
AMC's contribution per patron was up 30% from that four years ago. As a result, AMC has demonstrated at least for this quarter that we can report a healthy amount of adjusted EBITDA or be free cash flow positive without a complete return to the box office to pre-pandemic levels. Although pre-pandemic levels of box office would certainly be preferable.
As for that box office, this was an inspiring quarter that saw the North American, the so-called domestic box office surge, to $2.7 billion exceeding Q3 2022 by 38%, at achieving 95% of the pre-pandemic Q3 2019's box office. This is the closest our industry has come to quarterly box office levels that were considered normal in pre-pandemic times.
As for our cash. The reason that AMC Odeon has been surviving this ravaging pandemic, happily staying away from the bankruptcy courts, and while big chains like Cineworld Regal, or small chains like Alamo Drafthouse, or ArcLight did not is because at AMC, we've been maniacal in building up our cash reserves.
For those trying to understand how AMC successfully has been defying gravity, these past three and a half years. Having ample cash on hand is the secret sauce. It is having sufficient cash reserves that is enabled AMC's resilient here before and therefore, we will continue to seek equity capital, when it appears smart to do so.
As for our vastly improved contribution per patron, this is the real enduring lesson of AMC's third quarter results. Yes, we benefited from Barbenheimer, and from Mission Impossible: Dead Reckoning Part I, Sound of Freedom and Indiana Jones and the Dial of Destiny among other films. But if you look at attendance, rather than box office dollars, the domestic industry attendance in Q3 was actually 16% down from the third quarter of 2019. And yet, AMC was more profitable, attendance down, profits up. This came from the cumulative impact of all the many actions we have taken, especially over the past three-and-a-half years to change our faith.
Those actions include: one, our focus on expense management in a challenging inflationary environment; two, the pruning of our theater fleet by closing marginal theaters and opening successful new ones; three, cooperatively renegotiating many theater rents with our theater landlords; four, leading the industry with our having more customer pleasing, premium large format screens than any of our competitors; five, AMC's innovative moves to sell other things, everything from Barbie theme pink corvette models sold in our theaters for microwavable home popcorn, sold on the shelves of Walmart; six, all of the many innovative marketing and pricing AMC initiatives, which have caused us to achieve dramatic increases in revenues per patron, especially in our high margin, food and beverage activities; as well as number seven, capitalizing on the many scale advantages and opportunities that accrue to AMC by being the largest movie theater company in the U.S., in Europe, and globally.
Now, I'll pass this webcast over to Sean to provide more details on the financial results of Q3. Afterwards, I'll return to talk about some of our ongoing initiatives and AMC's thoughts about the future. Sean?
Thank you, Adam. And thank you to everyone for joining us this afternoon. As Adam just said, in the third quarter, we achieved two notable financial milestones. One, our best revenue and adjusted EBITDA since pre-pandemic 2019. And two, the highest revenue and the highest adjusted EBITDA for any third quarter in AMC's entire 103-year history. Of course, it also means that we beat pre-pandemic Q3 2019 adjusted EBITDA, and we did this by a resounding 24%.
This is a remarkable achievement because our attendance was nearly 16%, lower than in Q3 of 2019. Yet, despite having 13.5 million fewer guests, we grew revenue by 6.8% or $89 million, and we grew adjusted EBITDA by 24% or $37 million. This result clearly demonstrates the success of the actions that we have taken over the last four years to really elevate the guest experience, optimize our theater fleet, manage expenses, and improve our efficiency and overall profitability metrics. These results clearly illustrates our ability to deliver solid financial outcomes, even when the industry box office in attendance were below pre-pandemic levels.
With a third quarter North American box office of $2.7 billion, which is 38% above the prior year, we grew revenue by 45.2% to $1.4 billion. We grew adjusted EBITDA by $206.6 million to $193.7 million. And we grew net cash provided by operating activities by $289.5 million to a positive $65.9 million. With this quarter's results, we've not extended our unbroken string of positive adjusted EBITDA quarters to four and for the first time since 2018, we've generated a second consecutive quarter of positive net earnings and positive earnings per share.
Now, I'll turn to the North American business. Total revenue for the quarter increased by 41.2% compared to Q3 of 2022. This was driven by an attendance increase of 34.4%, which was helped by an increase in our market share. Admissions revenue per patron increased by 4.8% and food and beverage revenue per patron increased by 4.1%. Not that the revenue generated per patron for this quarter was 30.1% above pre-pandemic Q3 of 2019, and the contribution dollars per patron, which is defined as the revenue per patron less for exhibition, and food and beverage costs was 35.9% above Q3 of 2019.
In the international business, on a constant currency basis, total revenue increased by approximately 50% Five zero, compared to Q3 of 2022. This was driven by an attendance increase of 48.5% admissions revenue per patron is of 10.8%, and food and beverage revenue per patron increase of 10.5%. Note that international revenue per patron and contribution dollars per patron for the quarter were 18.4% of our pre-pandemic Q3 of 2019, as measured in constant currency.
Moving to cash flow and the balance sheet, we ended the quarter with cash and cash equivalents of $729.7 million. Operating cash generated a non-GAAP measure representing cash from operating activities after deducting capital expenditures. And before both debt servicing costs and deferred rent payback was that positive $109 million an improvement of $288 million compared to Q3, 2022.
Capital Expenditure net of landlord contributions was $49.8 million for the quarter, this brings our year-to-date net CapEx to $137.5 million. Based on our expected CapEx spend in Q4, we now anticipate net CapEx for 2023 to be in the range of $175 million to $225 million. During the third quarter, we continue to actively manage our theater portfolio. We added one new theater and we closed three. This brings the total number of locations that we have closed since the pandemic began to 156 and the total new locations opened to 57 for a net reduction of 99 locations. This portfolio rationalization together with ongoing landlord negotiation has unequivocally resulted in a more profitable theater portfolio.
Just as an illustration of our effective rent expense management, it's worth noting that Q3 2023 rents was 5.6% below the same period in 2019 in constant currency. This despite the significant CPI increases over the last four years. Going forward while we continue to invest in our business and the guests experience, our top two capital allocation priorities must remain one to ensure that we have sufficient liquidity to manage through our recovery period and two, strengthen our balance sheet.
Now we've made considerable progress in these two areas. During the third quarter, we successfully raised $325.5 million of gross equity capital, we've repurchased $24 million of debt as an average discount of 28%. And we also repaid $22.3 million of deferred rate. The deferred rent balance at the end of qQ3 was $74.2 million and we plan to reduce this balance by another $20 million by the end of this year.
So year-to-date, 2023 year to date, we have now raised $550 million of gross equity capital, we've lowered the principal value of our debt by $289 million through debt repurchases or exchanges of debt for equity and we've repaid $83 million of deferred rent. All told, we have reduced our debt and deferred rent liabilities by $372 million thus far in 2023, and a total of $764 million since the beginning of 2022.
In summary, our results for this quarter clearly show the positive impact of the significant enhancements that we have made and will continue to make to grow and to strengthen the business. As we navigate through this recovery phase, which may be extended by the Hollywood strikes, our primary financial priority will be to ensure ample liquidity, while concurrently continuing to make progress reducing debt and fortifying our balance sheet. Of course, we will also continue to pursue growth initiatives opportunistically, as they make sense. We believe that this approach overall would best position us to thrive in the future.
And now, I'll hand the webcast back to Adam.
Thank you, Sean. The successes of 2023 and the third quarter in particular, have clearly illustrated the allure and power of theatrical exhibition movies in theaters on the giant screen.
Before we move on to questions from our investors and from equity analysts, I like to quickly update you on six specific topics. First, merchandise. You may recall that we started getting serious about merchandise sells in our theaters and on our website as a result of specific show or suggestions that came in from our retail investors. We embraced the idea thoroughly and quietly it has become a pleasant success story.
It was literally a non-existent business for AMC in 2021. In 2022, we grossed about $10 million in merchandise sales, but by year end 2023. It will be more than a $50 million revenue source for us this year. Way to go shareholders, keep those good ideas coming in.
Second, popcorn in the home. Our lines of ready to eat and microwavable AMC Perfectly Popcorn have been a huge hit. Our six-month exclusive deal with WalMart Stores and Walmart.com proved to us proved to Walmart and proved to other retailers that consumers find AMC's product offering in this area to be compelling. So in addition to continuing with Walmart, I am pleased to announce today that over the next two months, we will be rolling out AMC perfectly popcorn to Kroger stores, including there are approximately one dozen brands of supermarkets around the country. And before Christmas, we expect to be placing it on the shelves of all of Publix supermarkets as well.
And if all goes according to plan, by Black Friday of this month, the day after Thanksgiving, AMC Perfectly Popcorn will be available nationwide on Amazon.com as well.
Third, given our success and branding our popcorn in November in December this month and next we also will be introducing a new line of AMC conceived and branded gourmet chocolate candies called AMC Cinema Sweets, our first use will be chocolate covered pretzels, chocolate covered almonds, chocolate covered peanuts, and chocolate covered raisins. Essentially, our learning at this company in this area is that just about anything tastes a whole lot better if it's strengths in soccer.
AMC strategy here will be your offer a top of the line quality treat with some of the finest chocolate made, and lots of it. Even though ours will be a gourmet line, we will sell at the same price as mass market brands. That's something that AMC can do, given the huge demand for candy products that exists within a movie theater environment, without a requirement for us to run up massive distribution, or marketing costs. At least initially, AMC Cinema Suites will only be sold at AMC theaters. And of course, in addition to carrying our own line of AMC Cinema Suites will continue to stock on the shelves at our theaters, the many name brand candy products that are there today.
Fourth, I'd like to address the situation that our industry is encountered for almost six months now due to the writers and actors strikes. It's gone on for almost half a year. The short term impacts of the writers and actors strikes will cause additional and needless challenges for AMC in 2024. Projects will get delayed from 2024 and future periods.
Without taking sides as to who is to blame for this labor stoppage or how the labor challenges should be resolved in negotiation, we strongly encourage all the parties involved to come to the negotiating table with the intent of reaching an agreement immediately. There has been and will be much collateral damage from these lengthy work stoppages. For the benefit of all involved in the movie ecosystem, AMC believes that this month long disharmony needs to come to an end now, whether one thinks of a studio executive or a union member in the creative community, it is ever so important that everyone in Hollywood returned to the task of creating world class entertainment that is admired and greatly enjoyed the world over.
Fifthm I'd like to quickly comment on our laser projection upgrade. It is categorically accurate to say that the future for AMC continues to get brighter. Thanks to our ongoing transition to laser projectors at our theaters. They increase on screen light levels by 50% to 100%. As a result, the images on the silver screen are getting sharper and brighter as every week passes. By the end of 2023, AMC will have converted more than 37% of our auditoriums across the United States to laser projection. Not only does this deliver improved picture contrast, more vivid color and greater picture brightness for our guests, this is the biggest single green initiative ever undertaken by AMC.
Laser projection is environmentally friendly, because it eliminates the problem of having used Xenon bulbs. And it brings a significant reduction to our energy consumption efforts as we show movies, to movie goers.
And finally, topic six, which is not the only thing we've been talking about around here the last five months. Taylor Swift, Taylor Swift, Taylor Swift, what can we say of our gratitude to Taylor for interesting AMC to distribute her Eras Tour concert to some 100 countries across the planet. As you'd likely know, with ticket sales expected to hover around a $0.25 billion, the Eras Tour is already the highest grossing concert film in history. And at the domestic box office Taylor Swift – The Eras Tour was the second highest grossing movie of all time for any and all genres to be launched during the month of October.
That's our role as distributor. As for our role as exhibitor, AMC's market share of ticket sales sold for Taylor Swift – The Eras Tour was unusually high. So both as distributor and exhibitor, AMC benefited handsomely both reputationally and financially from our having taken on this project, and that benefit will not be a onetime thing.
As we announced just a few weeks ago, AMC Theaters distribution is following its success with Taylor Swift, The Eras Tour with a concert film release of Beyoncé's Renaissance World Tour. Renaissance of film by Beyoncé will be released globally on December 1.
We are so privileged to be working with artists like Taylor Swift and Beyoncé, as they bring their creative vision to their fans, and we do so, too, in the United States and around the world. For what it is worth, in working with two of the most admired pop stars in the planet, we already have touched Lightning. All of us at AMC are now passing to Swifties and are probably in the BeyHive.
We are optimistic though that this will lead to much more ahead. This is not just a onetime thing in 2023. We believe that we will have several more concert film products in 2024 and 2025. We intend to be working with some of the most known and most loved physical artists the world has ever known. For those of you who don't think that this will prove to be transformational for AMC, watch this space. If as and when more artists come on board, there is significant incremental profitability ahead for AMC from our going down this sizable fan filled road.
If one would think back to March of 2020, if I had to summarize our view as we sit here today, going back to a time when all theaters were shut. And think about what has transpired since? You'll note that the recovery of the movie industry and of the movie theater industry has not been a straight line. Indeed, to the contrary, it's been a wild ride with passes and turns that no one would have predicted.
Through it all, though, AMC has clearly emerged as the leader of the pack, and we've done so back by an army of enthusiastic shareholders. Looking ahead, there likely will be challenges for us to conquer still. A prolonged actor strike and rising interest rates are not helpful. We still have significant debt to pay down or to refinance, although that's mitigated somewhat because most but not all of our current maturities do not start before 2026.
But looking again at sort of the glass half empty, many of our shareholders are in sense, truly in sense by stock market practices that they do not trust. If that's not enough, there's war in Europe and there's more in the Middle East. The list of problems we dealt with goes on and on and on. But if there ever was a time to look past the immediately foreseeable challenges of the day.
For AMC, it might be right now right after reporting AMC's third quarter 2023 earnings. It was, after all, the single best third quarter for AMC in some 103 years. These were stellar results. To our shareholders listening in to this webcast. We hope you share our pride in the progress that's being made by AMC. This, after all, is your company. And we benefit in so many ways from your enthusiasm and from your passion for AMC.
With that, Sean, let's now move to questions from our shareholders and industry analysts. And as a change of pace, let's start with questions from industry analysts. In lead position, and then we'll take questions from our shareholders batting cleanup, so to speak, as we close out today's call.
Jenny, can you provide instructions?
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question is from Alicia Reese from Wedbush. Please ask your question.
Hey, Adam and Sean, how are you guys doing? Nice quarter. Congrats on that.
Thank you. And to answer your question, we're doing well, it was a nice quarter.
It was, indeed. I have a couple of questions. First of all, I'm wondering if you could talk a little bit more quantitatively in terms of Taylor Swift. In terms of the distribution versus just exhibiting this film. And same for Beyoncé. If you could talk about that quantitatively, what's the benefit of distributing that in terms of market share or in terms of film rent and if not that, then a little bit more qualitatively about that, if you can.
Sure. Let's talk quantitatively first. We know it to the penny, I mean, literally to the penny, and it's sizable. But those are stats that we're going to unveil on the fourth quarter call, not on the third quarter call. For what — we did very well. We're going to make a handsome profit from having a facilitated what was in July only in-stadium concert tour getting it converted to film and getting it in theaters quickly.
As I said, we know the numbers. We know them cold. We review them almost daily with the entourage that surrounds Taylor. We're all smiling. They're smiling, we're smiling. Our market share is abnormally high of the tickets sold. And I think that, in part, is because we've been so committed to the project. It's pretty hard to pick up a newspaper anywhere in the world or to go on the Internet and look at news and not see the AMC name connected to Taylor Swift.
Beyoncé's right behind it. As you know, Taylor's film has grossed in four weeks. It grossed to $165 million domestically and about $240 million something sorry, $220 million globally. It's still going in theaters. It's not stopping at four weeks. There will be a weekend five and weekend six, weekend seven and weekend eight, and so the numbers will continue to grow. We don't expect that Beyoncé's concert tour will be as large in theater as was Taylor's, but we do expect it to be significant and meaningful. And both the Eras Tour and the Renaissance tour taken together will provide a healthy bit of profitability for AMC in calendar year 2023.
What's also exciting to us is not just the profitability that comes our way this year, but our prospects for 2024 and 2025. Our phone has been dancing off the hooks, really, since the day we announced the Eras Tour project on August 31. There are a significant number of the world's best artists who would like to explore doing things with AMC that Taylor and Beyoncé Knowles-Carter just did. So, again, I think our prospects are this is a moneymaking venture in 2023, and it will be a moneymaking venture for us in 2024 and beyond.
I also would like to say that as much credit as AMC has received from taking the lead on this project. And I might add that with the writers and actors strikes, there were some movies that were going to move out of the fourth quarter. So there were some holes in the calendar in the fourth quarter. It was a pleasant thing for movie theater operators that rolled over to have an unanticipated gift of a Taylor Swift concert film or Beyoncé Knowles-Carter, concert film added to the calendar for the fourth quarter, just added just literally a month or two in advance of the quarter commencing.
We could not have done this alone. And I would specifically like to give credit to so many of our competitors who also chose to play the Taylor Swift movie and the Beyoncé movie. We could not have done this without the cooperation of Cinemark and Regal or of Cinepolis and Cinemax in Mexico or Cineplex in Canada. And it's also true that literally all across the globe, movie theater chains in some 100 countries have embraced the showing of the Eras Tour and the Renaissance tour.
So this is something that is particularly good for AMC because we did it, but it's particularly good for our entire industry because literally, just about everyone in our industry is benefiting from the incremental revenue that no one would have expected to see just a few months ago.
As for the specifics of the question, Alicia, I promise we'll give you every number there is, but we're going to do it on the next call.
Yeah, that makes sense. Appreciate that. If I can ask one more. Just wondering if you can give some commentary around the premium large format screens and the impact on your market share as the biggest footprint for IMAX, Dolby and then how your proprietary PLFs are performing across your circuit right now.
Sure. So I actually think this is one of the biggest success stories of AMC. When we look at our PLFs and that's IMAX, Dolby Cinema prime here in the United States, iSense in Europe, they are our most successful screens. First of all, they sell first and they fill higher than regular screens.
If you take a look at the box office dollars for us of a premium large-format screen, it essentially becomes the equivalent of four regular screens. Think about that. Every one of our PLFs on average is grossing about four times that of a regular stream. And in the case of AMC, we have 550 of these things around the world. No one anywhere comes close to the number of PLFs that we have. About half of all the IMAX screens in North America are at AMC. A 100% of all the Dolby Cinema screens in the United States are at AMC.
And — so this is just a massive success for us, and it's something that we're committed to doing. We would like to — we not only have expanded the number of PLFs in our company, but we've improved the quality of our PLFs. So we've gone back — I mean, almost all of our Dolby Cinemas have been installed over the last eight years. But some of our IMAX screens are much older.
So we've gone back into our IMAX screens and reinvested in those screens with IMAX laser and upgraded sound systems. And in both cases, both for IMAX and for Dolby. We'd like to increase the number of our locations. So the only — and similarly, we intend to grow the number of our so-called house brand, iSense in Europe and the primes here.
We think we have 550 — and round number is 550 of these things today. We think we could add 150 more. And the only — and where the consumer would support that level of supply of premium large formula screens. The only limiting factor and a balancing factor is cash because as Sean said, we're always balancing chasing growth initiatives on the one hand and ensuring that we have ample liquidity on the other and strengthen our balance sheet by using some of our cash to pay down debt.
So what tempers our ability to capitalize on the growth initiatives that are right there in front of our eyes is this art form of how much money do we invest in growth initiatives and how much do we invest and pay down debt? And how much do we just put in the bank and save for a rainy day to bolster our cash position? But there is no doubt there is enormous opportunity ahead. And we really do believe that more than any other chain in the world, AMC is home of the PLFs or the so-called premium large-format screens. And that's an advantage that we intend to sustain and improve upon in the years going forward.
Adam, with that, should we go to some questions from our shareholders?
Please let's do.
Unless there are any questions from equity analysts. But I think at this point as questions from our shareholders. So the first question, Adam, is about alternative content, and we've spoken a lot about Taylor Swift. But the question is, can you talk more about future opportunities? And what other sort of content are we considering to bring into our theaters?
Well, given that — in one of our most important forays in the alternate content, we just added $0.25 billion to the world's box office and 165 of that is in the United States alone. I don't think anybody has been chasing all the content more aggressively than AMC.
Clearly, this whole genre of concert films is something that we've learned. There's a lot of demand for out there, and so we'll chase it hard. But it's not limited to concert artists.
I continue to think that professional sports is an enormous opportunity for the movie theater industry. If you think watching a football game on your 45-inch or 55-inch or 65-inch TV at home looks good, imagine how it looks on a 45-foot or a 55-foot or a 65-foot screen at an AMC theater. And so I think the second thing that you'll see us chasing beyond these concert films is sports. It's been a multiyear effort to try to get the rights to do so, but it's something that we are in active pursuit of as we speak.
And then beyond that, there's all sorts of other content whether it's ethnic film product like Bollywood products or some Asian language film or Hispanic language film, we can bring here in the United States. That — those are opportunities that we're already pursuing and our year-over-year growth are small, but our year-over growth in those segments has been quite high.
We've had a partnership with [Indiscernible] for a long time where they bring lots of other interesting content to our screens as well. So clearly, there's an opportunity here and it's Taylor Swift demonstrated that it can be sizable dollars if it's done right. So it's clearly on AMC's radar screen.
A lot of interest in our food and beverage offerings. And there's a question about other than popcorn, what are our other food and beverage initiatives and what plans do we have to bring other AMC products food and beverage products through retail distribution channels.
If there's one area where we can take enormous pride at AMC, it's what's happened to our F&B business and the last years. Prior to the pandemic, F&B spending was about $5 a head in round numbers at AMC. And these are domestic numbers that I'm using right now. And post-pandemic, it's been about $8 ahead. That increase of $3 a head is meaningful when you think that we have a very high-margin food and beverage business. I often joke that we sell air and water. We sell pop worn and soft drinks. And so it's a very profitable business for us.
And the fact that we've seen such an increase in the spending per patron is very beneficial to us. Other chains also have seen increases in their food and beverage capture, but I continue to believe that of the — not the so-called dine-in — the small dine-in theater chains. But the mass market brands, our food and beverage capture continues to be the highest in the industry.
And it's no accident. We work at getting an interesting variety of products at our dine-in theaters and on the concession shelves in our non-dining theaters. We've — and there continues to be opportunity. So the thing we're doing right now, of course, on this call, I announced that we're launching AMC Silver Suites this month and next, about quarter inch of pretzel, about 4 inches of chocolate on top of the pretzel. It's a lot of chocolate.
It's a really good chocolate too, and we're optimistic so we're going to start with that in our theaters first. But just like we proved that we could take AMC Perfectly popcorn to the home. If we see that there are big sales of the embassy Cinema suite, in our theaters, we might take that out to the outside world the same way we took Perfectly Popcorn to Walmart, Kroger's, Publix and Amazon.com.
So it's been a great success story for us. And we continue to look for ways to grow further. As one last one, they're growing it further part. I think what's so fascinating to me is how successful we've been with merchandise, movie themed that's being sold at our concession stands just about every week in the year now. We're selling anywhere from 100,000 of these things a weekend to 1 million of these things the weekend. And we're selling to a handsome profit. And whether it's a 10 popcorn tub for Taylor Swift's movie or Pink corvette for Barbie movie or any other array of creative things that we've introduced over the course of the year, title by title by title by title. We're driving a lot of business now with these things, and we really keep that going in 2024 as well.
So let's talk a little bit more about the operating improvements that we have done since the beginning of 2020, which are clearly evident in our results for this quarter. And the questions about those operating improvements that we've made that will really allow AMC to thrive in the future.
So we had no choice. We had to get more efficient. Because during the ravages of the pandemic, we had no revenues. And so we've gotten this company to be much leaner than it ever was before. The head count in our corporate headquarters is way down. The managerial head count in our theaters is way down. In the case of our European theaters, we've automated so many of them with automated box offices and automated food beverage operations. We're starting to bring the automated food and beverage guests back into the United States as well.
We had to get more efficient, and we did get more efficient. You in your prepared remarks talked about the progress we made with landlords where we renegotiated our rents downwards to the tune of tens of millions of dollars of benefits a year. Also, we've just gotten more efficient in terms of what's in our fleet.
As you said, we've closed about 150 marginal theaters that were either marginally profitable or not — or money losers and replace them with 50 theaters that are enormous successes. The 50 theaters that we opened are grossing far more than the 150 theaters that we closed and yet our operating expenses, by definition, are the third of what they were to operate triple the theater count. So just in area after area, after area, this company has gotten leaner and more efficient. And that's something that drove these third quarter results, which are so good.
If you look at — the number is hard you'll still see attendance was off 16% compared to 2019. And if attendance is up 16% that's 16% fewer bodies that you can sell food and beverage too. And yet with attendance down 16%, we still are far more profitable in 2023 than we were in 2019. That's the direct result of becoming more efficient. And that efficiency that we realized is a permanent efficiency. So that's going to be something that's going to continue in our numbers going forward.
Yeah. And there's a final question, which I think relates very much to what we just discussed about the operations, but just about use of technology to really enhance the customer experience. And you mentioned some of that about the kiosks. And I guess there's other things that we're doing on using technology as well, right?
So, we joke that we can't go do the math of this company without programming in the computer first. But you would think this is a pretty simple business. You have a building, you're turning the lights, you have a projector, you shine a picture on a wall, maybe you had people to cut of Coca-Cola or popcorn on the way in the door. And yet it's surprisingly intricate and complicated. And one of the reasons for that is literally everything that goes on in our theaters is automated in some shape or fashion. And we've used technology to our advantage.
We have a loyalty program, Stubs and A-List where we track the purchase history of our best customers and reward them for it. The reason we can pull that off is because our tech is so good. Very quietly during the pandemic, we put mobile order on our website and smartphone app so that literally every guest who buys a ticket online has the opportunity to prebuy their AMC food and beverage. And our experience is we're selling more food and beverage products to the people who are using mobile order.
Again, that could happen, but for our tech. The way we distribute movies to theaters. Christopher Nolan still like 70-millimeter film, but everybody else and even Chris Nolan, everybody else sends their movies to our theaters digitally via satellite and they received on a computer server. That's a direct result of our tech. So I do believe that from a technological standpoint, we're pretty sophisticated as an operator today, and we're committed to continuing to invest in technology both to benefit the guest to make the experience better to make ourselves more efficient, which means we can squeeze out more profitability on the same revenues. I was also to stay ahead of the curve in an era where all things seem to be affected by tech.
Terrific. That concludes the questions from investors.
So let me end the call simply by saying this, it doesn't get any better than the third quarter of 2023. We beat market expectations by about 50%. It was a profitable quarter when people were expecting a loss. Revenues were booming. But it wasn't just the revenue growth that caused our success. It was also our management of expenses the combination of which led to a very successful quarter.
We do have — it would be helpful if Hollywood could end the actor strike. It will be helpful if we don't see movies move from '24 to '25. But as I sit here today, I think we're enormously optimistic and confident in the future of the movie business.
AMC is the leader of it. We do — we do well. And the third quarter of 2023 reminds us that when all things are aligned, this can be a very profitable industry. With that, thank you, one and all, for listening. If you haven't seen Taylor Swift movie yet, go see it, if you haven't bought a ticket yet for Beyoncé's movie, go buy one. And we'll happily see you as Christmas movies come out at our theaters in just a few weeks' time. There are a lot of big movies coming. Movie theaters are going to be bustling in December of 2023 and beyond. Happy holidays to one and all, and we'll talk to you next quarter
Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect.