Wednesday, July 27, 2016

Heard On... Six Flags' 2nd Quarter 2016 Earnings Call

Today was the earnings announcement for Six Flags' second quarter of 2016, which is another for the company's record books.  For the quarter, revenues were up $21 million or 5%, and attendance saw a 2% increase to 9 million.  The company, like usual, held a conference call today to discuss the earnings - here are some noteworthy items:

• Licensing revenues from international park developments was up 132% for the quarter and for the first half of the year equaled $14 million.  The park in Dubai has broken ground and the company recently announced plans for another park in China, with a water park, that will be one of the largest Six Flags parks.  Beyond what has been announced, there are several other deals already in the works.

© Six Flags
• Park operators report that the virtual reality experiences added to roller coasters at 9 of its parks have received "outstanding" responses from guests.  It will soon be added to a 10th park, and plans for the other 3 parks to have it are in the works.  They're also working on virtual reality "worlds" for both Halloween and Christmas events.  They did note a learning curve on the capacity of virtual reality rides, but say that they are "pleased with our throughput" at this point.

• An all season Flash Pass, for skipping attraction lines, was tested earlier this year and deemed a success, and will now be rolled out to all the parks by 2017.

• Work is progressing on Six Flags' new water park in Mexico, planned to open in early 2017.  Operators say there is a ton of interest in the park already and it will be marketed jointly with Six Flags Mexico.

• Season Pass and Season Membership sales continues to soar for Six Flags, with overall active pass base up 11% year over year.  Even with more pass holders attending the parks the per cap spending for each guest is still up 3% for the first half of 2016.  All-season dining passes are also growing and resulting in increased food and beverage revenues.

© Six Flags
• Future growth is planned to come from four major areas:  more attendance from passes and memberships, slow increases in pricing over time, even more growth from the all-season dining passes, and international developments which require no capital and have very high margins.

• I did not hear any mention of announcements for 2017 yet, and with a new CEO I am wondering if perhaps the big announcement all on one day has been retired?  Just a theory, I'm sure we will find out soon enough.