Cedar Fair Reports Slower-Than-Expected Start to Key Season
Cedar Truthful Leisure
had been down greater than 7% on Wednesday after the theme-park operator reported a slower-than-expected begin to the important thing summer season season.
The Sandusky, Ohio, firm stated internet income from the beginning of the yr via July eight, a interval that represents about 40% of its complete working days for 2018, fell 2% to about $563 million, as visitor visits slipped three%.
Shares of Cedar Truthful fell 7.1% throughout buying and selling Wednesday to $59.95. The inventory is down 14% over the previous 12 months. Shares of rival
Six Flags Leisure
additionally moved decrease, falling about 1.9%, and shares of
slipped about 1.four%.
Cedar Truthful stated early-season attendance at its seasonal amusement parks and water parks hasn’t met expectations. Just about all income from its seasonal parks is realized throughout a 130- to 140-day working interval starting in early Could, with the main portion concentrated in July and August.
Nonetheless, the corporate stated robust attendance and income traits at Knott’s Berry Farm in Buena Park, Calif., which is open all yr, continued via the July four vacation weekend.
Cedar Truthful President and Chief Govt
stated that though early-season attendance was beneath expectations, the corporate has been eyeing the way to enhance income within the second half of the yr, together with including extra occasions in November and December. Mr. Zimmerman stated prospects are responding properly to new points of interest, staying longer on the parks and spending extra on meals, merchandise and extra-charge points of interest.
Cedar Truthful owns 11 amusement and water parks, together with California’s Nice America in Santa Clara, Cedar Level in Sandusky, Ohio, and Dorney Park and Wildwater Kingdom in Allentown, Pa.
Cedar Truthful stated it expects 2018 income of $1.34 billion to $1.38 billion and full-year adjusted earnings earlier than curiosity, taxes, depreciation and amortization of $475 million to $495 million. Analysts polled by FactSet had been searching for 2018 income of $1.39 billion and Ebitda of $509.four million.
Cedar Truthful stated it has seen early-season margin compression on account of attendance shortfalls and labor-cost strain, however the firm stated it continues to supply a major quantity of free money circulation and stays dedicated to a gentle four% enhance in its annual distribution.
In a analysis word printed Wednesday, Tyler Batory, an analyst with Janney Montgomery Scott, wrote that poor climate circumstances in sure markets, particularly round July four, might have dampened the outcomes. He added that though buyers may try to make use of Cedar Truthful’s disclosure as a proxy for Six Flags, that amusement park chain has a extra diversified mannequin, together with water parks it has acquired in California and Mexico.
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