Six Flags stock soars on earnings beat, consumer demand

The Yahoo Finance Live show discusses the rise of Six Flags stock on earnings due to growing consumer demand and the outlook of the company's pricing regarding consumer trends.

Video Transcript

JOSH SCHAFER: And speaking of that, a company that did beat my play today is Six Flags. Shares of the theme Park operator trading higher today as the company reported better than feared earnings during the traditionally slower winter months. Despite attendance down 5% compared to last year, total guest spending and admission spending per capita were up compared to the first quarter of 2022. This drove revenues of $142 million, up 3% last year, and nearly 9% above street estimates.

Six Flags CEO saying that there continues to be a growing consumer demand for local out-of-home entertainment. And Seana, the other thing I wanted to point out here that is interesting is Six Flags piloting this dynamic pricing program. So the way this works is prices are going to fluctuate now based on how much demand there is. It makes a lot of sense to me. I know you're a sports fan. Akiko, you're a sports fan too.

This sort of reminds me of how that works, right, when there's a less popular day or less popular game to go to, you get to pay cheaper prices, and maybe you can get more people through the door. It seems like that's what Six Flags is trying to do here, and maybe we'll bring more people in during that winter style month.

SEANA SMITH: Yeah, exactly. And if you take a look at the trend, you would say that they're certainly off on the right foot here. When it comes to the pricing power though, I think that is what the Street is-- I don't know if it's fair to say taking issue with, but not exactly sold on whether or not this is going to be successful. Stifel was one of those teams that was saying today that they're pretty much still on the fence about this.

But they did say that the last two quarters give them some hope that Six Flags is on the right track, but this is another play. When we talk about getting a good look here at the consumer, people are going out and being-- they're still spending on things that are fun, discretionary, not so much staples. So I think these results surprising the street just a bit in terms of the resilience or the improvement that we have seen at Six Flags attendance.

Like you said, at least revenue in terms of attendance, that jumped on a 10% basis spending on park admissions decline though in overall attendance, which Akiko, they're pretty much just blaming on the weather. They're not too worried about that.

AKIKO FUJITA: Yeah. You know, this is a really interesting one for me, guys, because we've been talking about where consumers are willing to spend. We're talking about travel earlier about, with those high ticket prices, are people still going to shell things out, shell out money to travel? You mentioned what we heard from the company saying, there's still high demand for local, out-of-home entertainment. That's going to be something to watch going into the summer season.

It's not cheap, by the way, to go to these amusement parks. Six Flags is that a lower price point with, you know, compared to Disney, which is not saying a whole lot because that's pretty expensive.