There are a lot of bad ideas on the slippery path of a downward spiral. AMC Entertainment (AMC +8.74%) has gone through its share of misfires, as the stock has plunged 99.7% since notching an all-time high four years ago.
- Remember when AMC announced that it would let moviegoers pay for movie tickets with crypto in the fall of 2021? AMC shares have fallen by 99% since then.
- Cryptocurrency isn't the only asset class in its playbook. In the spring of 2022, AMC thought acquiring a small stake in a small gold mining company would make it shiny and malleable. The stock has since surrendered 98.5% of its value.
- How about the time it diluted shareholders with AMC Preferred Equity in the summer of 2022, largely because of the cleverness of the APE acronym in the offering? The stock is down 98% since then.
- The brazen cockiness behind launching a co-branded credit card in the spring of 2023, assuming that the masses would be swiping that plastic for everyday charging? AMC stock is trading 96% lower now.
AMC's schemes haven't paid off, but sometimes the country's largest multiplex operator does get things right. Reserved seating, MacGuffin bars, and the AMC Stubs A-List are brilliant moves in an otherwise dreary stock story. And it may be quietly rolling out another winner now.
Image source: Getty Images.
A kernel of truth
The AMC Popcorn Pass rolled out this week. Members of the movie theater stock's AMC Stubs loyalty rewards program can now pay $29.99 for access to 50% off a large popcorn bucket, every day, through the end of 2026.
So what's the big deal here? Bottomless food promotions rarely work. Unlimited shrimp drove Red Lobster to bankruptcy reorganization. Amusement park operators that used to lean on seasonal dining plans to woo annual pass sales now realize that they attract the wrong crowd while also diminishing the brand. The few eatery chains that still offer limited-time food passes do so more for media attention than operational improvement.
But this pass is different. Patrons still need to buy a movie ticket to get to the concession stand, and the new popcorn pass will ramp up the frequency of those visits. It should also inspire more infrequent moviegoers to join the AMC Stubs A-List program, another premium subscription offering through which members can see up to four screenings a week.
This might seem like a losing game, but stacking a 13-month pass on top of a monthly subscription will keep churn low. AMC is also likely to gain market share in 2026. Suddenly, selling half-priced popcorn doesn't seem like a half-baked idea.
NYSE: AMC
Key Data Points
Coming attractions
Marking down hot buttered popcorn might seem desperate, especially as you zoom in on an exhibitor's business model. Movie theaters send roughly half of their ticket sales to the studios making the films. They keep all of the high-margin concessions. And that's why you pay up for snacks and beverages at the concession stand.
AMC's gross margin through the first nine months of this year was a whopping 80% on its concessions. So it can sell popcorn at half off and still make a lot of money. Plus, the boost in salty popcorn sales is going to drive more full-priced beverage sales. How can it not?
A large popcorn bucket is also pretty big. It's made for sharing. Someone with the pass will invite others, potentially converting them into AMC Stubs A-List members with AMC Popcorn Pass subscriptions. Analysts see revenue growing in the high single digits next year. Don't be surprised if something as simple as this can deliver annual double-digit revenue growth at AMC for the first time since 2023.
Don't fret the margin crunch on the discounted popcorn. It will make up for that in scalability. And don't worry about late-night talk shows that will make fun of the AMC Popcorn Pass. Meme stocks that become penny stocks don't have a lot of success stories, but AMC has it right. This is a smart business move that should ultimately leave AMC and its shareholders having the last laugh in 2026.
