Six Flags Entertainment Corporation ((FUN)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Six Flags Entertainment Corporation painted a mixed picture, highlighting both challenges and opportunities. While the company faced significant weather-related disruptions and financial performance fell short of expectations, there were positive signs of recovery in July. The introduction of new attractions and successful cost reduction efforts also contributed to a more optimistic outlook. Strategic actions and early momentum in 2026 season pass sales provide hope for future growth.
Strong July Performance
In July, Six Flags experienced a 1% year-over-year increase in attendance, with a notable 4% rise over the last four weeks. This rebound suggests a recovery in demand following earlier weather-related disruptions, offering a glimmer of hope for the company’s future performance.
Success of New Attractions
The debut of the AlpenFury coaster at Canada’s Wonderland resulted in a 20% increase in attendance. Additionally, Fast Lane sales saw a 20% lift, and season pass sales surged by more than 100,000 units. These figures underscore the positive impact of new attractions on the company’s overall performance.
Cost Reduction Initiatives
Six Flags has successfully realized $55 million in cost synergies in 2024, with plans to achieve a $90 million reduction in expenses for the second half of 2025 compared to 2024. Notably, two-thirds of these savings are expected to be permanent, highlighting the company’s commitment to improving its financial health.
Strong Start to 2026 Season Pass Sales
The 2026 season pass program has seen a remarkable increase in sales, with 700,000 units sold. This achievement has significantly reduced the second quarter deficit by more than half in just one month, indicating strong consumer interest and potential for future revenue growth.
Significant Weather Disruptions
Severe weather impacted 20% of operating days in Q2, including 49 complete park closure days, leading to a 12% decline in attendance over a six-week period. These disruptions have posed considerable challenges to the company’s operations and financial performance.
Lower-than-Expected Financial Performance
The company’s adjusted EBITDA was revised downward to a range of $860 million to $910 million, from the previous $1.08 billion to $1.12 billion. This adjustment reflects the impact of weather disruptions and a smaller active pass base, underscoring the financial challenges faced by Six Flags.
Increased Costs
In Q2, Six Flags incurred approximately $25 million in additional expenses, including $19 million in advertising costs originally budgeted for the second half of the year. These increased costs have affected the quarter’s profitability, adding to the financial pressures on the company.
Leadership Transition
CEO Richard Zimmerman announced his intention to step down by the end of 2025, introducing potential uncertainty during the leadership transition period. This change in leadership could have implications for the company’s strategic direction and operational stability.
Forward-Looking Guidance
Looking ahead, Six Flags management provided guidance for the second half of 2025, adjusting their full-year adjusted EBITDA forecast to a range of $860 million to $910 million. This revision accounts for challenging weather conditions, a smaller active pass base, and more value-conscious consumer behavior. Despite a modest increase in attendance in July, the company expects attendance for the second half of the year to remain flat compared to last year. In-park per capita spending is projected to decline by approximately 3%, aligning with recent trends. However, the company aims to reduce second-half operating costs by $90 million, resulting in a full-year cost reduction of 3% compared to the previous year.
In summary, the Six Flags earnings call highlighted a mixed sentiment, with both challenges and opportunities on the horizon. While weather disruptions and financial performance posed significant hurdles, the success of new attractions, cost reduction initiatives, and strong season pass sales offer a positive outlook. As the company navigates leadership changes and adjusts its strategies, investors will be keenly watching for signs of sustained recovery and growth.