Imax share prices have dropped nearly 28% since April 1. Today the stock hit its lowest level since 2013 following the downgrade in recommendation from Benchmark Co’s Mike Hickey from “hold” from “buy.”
An Imax spokesperson says that “the long-term health of our business is very strong as evidenced by theater signings, installations, [and] theater backlog” along with “strong relationships with theater operators, studios, directors and talent.” However, it is expected the current quarter could be the fifth in a row in which Imax will report declining global per-screen attendance.
Imax’s sales for films including The Fate of the Furious and Guardians of the Galaxy Vol. 2: The Imax Experience did not meet expectations.
“Although anecdotal, we have noted demand for recliners within standard auditoriums over an Imax experience, and note that a few competitive [premium large format] solutions offer recliners.”
If Imax follows suit by reducing the number of seats in venues to accommodate recliners, then that “could have a detrimental and lasting negative impact” on per screen attendance.
Imax says that recliners probably are not “a significant factor, particularly since 75% of our theater network is outside of North America where that kind of seating doesn’t exist.”
Stay tuned, kids..