FUN - Weather check: Cedar Fair is the second theme park operator to link traffic drop to outside conditions

2023-08-03 09:25:30 ET

Cedar Fair ( NYSE: FUN ) reported revenue fell 2% in Q2 to $501M. Attendance fell 6% during the quarter to 7.4M guests, due in part to "extreme" weather over the period at key parks.

In-park per capita spending was up 3% to $61.46, driven by higher levels of guest spending on admissions and food and beverage. Out-of-park revenue rose 5% to $62M. FUN's adjusted EBITDA tally for the quarter was down 11% from a year ago to $151M.

"Unfortunately, anomalous weather patterns – including unprecedented rainfall in California and wildfires in Canada – have significantly disrupted year-to-date attendance, as well as sales of 2023 season passes, creating a headwind on demand," noted Cedar Fair CEO Richard Zimmerman. "To better adapt to changing market dynamics, we have expanded our research efforts to further isolate the impact of macro factors on specific markets," he added.

Cedar Fair ( FUN ) said it is increasing marketing outreach activities at its largest parks and is testing limited-duration pricing for single-day tickets, with the goal of driving incremental demand and creating urgency to visit parks over the balance of the summer operating calendar and into the important fall season.

Earlier in the week, SeaWorld ( SEAS ) also warned on "adverse" weather conditions that impacted traffic. Macquarie analyst Paul Golding took that mean to excessive heat. "Another consideration going forward is weather volatility broadly, its rising propensity on a global basis, and the potential for more consistent, excessive heat during peak visit timeframes, although this might be more impactful to Q3 on temperature specifically," he noted. Of course, a drop in consumer discretionary spending is still seen as a primary reason for theme park traffic to be under pressure.

Shares of Cedar Fair ( FUN ) trickled 0.20% higher in premarket trading. SeaWorld Entertainment ( SEAS ) was off 0.15% in the early session and Six Flags Entertainment ( SIX ) rose 2.80% ahead of its earnings report on August 10.

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