Sunday, October 20, 2019

EXHIBITOR BOASTS ABOUT POPCORN PROFITS

March 9, 2011 by · 1 Comment 

David Ownby

Comments at an investors conference by David Ownby, CFO of theater-chain owners Regal Entertainment Group, about the company’s popcorn profits have drawn the ire of BTIG analyst Richard Greenfield. Greenfield quoted Ownby as saying, “One of my friends is a commodity trader and every time the price of popcorn goes up, he calls me to remind me that it’s going up. And I like to remind him that we sell a bucket of popcorn for $6. Our cost in that $6 bucket of popcorn is about $0.15 or $0.20. So if that cost doubles it doesn’t really hurt me very much.” Greenfield concluded: “We believe exhibitors’ core strategy of raising ticket prices through 3D premiums and pushing concession pricing as far as humanly possible, in the midst of shifting theatrical release windows is a dangerous strategy. Exhibitors should be less concerned with paying dividends and maximizing near-term revenues/profits through $6 buckets of popcorn at 98-percent margins than with increasing consumer satisfaction with the movie-going experience.”