Six Flags (NYSE:SIX) Misses Q1 Sales Targets

Adam Hejl /
2024/05/09 7:58 am EDT

Amusement park operator Six Flags (NYSE:SIX) fell short of analysts' expectations in Q1 CY2024, with revenue down 6.3% year on year to $133.3 million. It made a GAAP loss of $0.98 per share, down from its loss of $0.84 per share in the same quarter last year.

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Six Flags (SIX) Q1 CY2024 Highlights:

  • Revenue: $133.3 million vs analyst estimates of $136.7 million (2.5% miss)
  • EPS: -$0.98 vs analyst expectations of -$0.91 (7.2% miss)
  • Gross Margin (GAAP): 6.2%, down from 16.6% in the same quarter last year
  • Visitors: 1.7 million
  • Market Capitalization: $2.11 billion

"Our 2024 season is off to a promising start, with 2024 season pass sales through April increasing by double-digits compared to last year, pre-booked group sales approaching pre-pandemic levels, and our park beautification and technology initiatives resonating strongly with our guests," said Selim Bassoul, President and CEO.

Sporting the fastest rollercoaster in the United States, Six Flags (NYSE:SIX) is a regional theme park operator offering thrilling rides, entertainment, and family-friendly attractions.

Leisure Facilities

Leisure facilities companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted their spending from "things" to "experiences". Leisure facilities seek to benefit but must innovate to do so because of the industry's high competition and capital intensity.

Sales Growth

A company's long-term performance can indicate its business quality. Any business can enjoy short-lived success, but best-in-class ones sustain growth over many years. Six Flags's revenue was flat over the last five years.

Six Flags Total Revenue

Within consumer discretionary, a long-term historical view may miss a company riding a successful new product or emerging trend. That's why we also follow short-term performance. Six Flags's recent history shows a reversal from its five-year trend as its revenue has shown annualized declines of 4.5% over the last two years. 

We can better understand the company's revenue dynamics by analyzing its number of visitors, which reached 1.7 million in the latest quarter. Over the last two years, Six Flags's visitors averaged 7% year-on-year declines. Because this number is lower than its revenue growth during the same period, we can see the company's monetization of its consumers has risen.

Six Flags Visitors

This quarter, Six Flags missed Wall Street's estimates and reported a rather uninspiring 6.3% year-on-year revenue decline, generating $133.3 million of revenue. Looking ahead, Wall Street expects sales to grow 6.3% over the next 12 months, an acceleration from this quarter.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income–the bottom line–excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Six Flags has been a well-oiled machine over the last two years. It's demonstrated elite profitability for a consumer discretionary business, boasting an average operating margin of 22.7%. Six Flags Operating Margin (GAAP)

In Q1, Six Flags generated an operating profit margin of negative 48.9%, down 12.2 percentage points year on year.

Over the next 12 months, Wall Street expects Six Flags to become more profitable. Analysts are expecting the company’s LTM operating margin of 19.6% to rise to 26.9%.

Key Takeaways from Six Flags's Q1 Results

It encouraging to see Six Flags narrowly top analysts' visitor expectations this quarter. On the other hand, its revenue and EPS fell short of Wall Street's estimates. Overall, this was a mediocre quarter for Six Flags. The stock is flat after reporting and currently trades at $24.98 per share.

So should you invest in Six Flags right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.