Summer box office 'should rival' pre-Covid levels as theaters go 'lean and mean': Analyst

Disney's "Guardians of the Galaxy Vol. 3" (DIS) exceeded box office expectations this past weekend, securing $118.4 million domestically to bring its global total to $289.3 million.

IMAX (IMAX) announced it grossed $25 million from the debut — the company's biggest global opening thus far in 2023.

Those results, on top of Universal's "The Super Mario Bros. Movie," which surpassed $500 million domestically, adds to early momentum heading into the hotly anticipated summer box office season.

"I think it's going to rival the pre-pandemic levels for summer box office," Paul Dergarabedian, Comscore senior media analyst, told Yahoo Finance Live on Monday.

Dergarabedian called out upcoming films like Pixar's "Elemental," Disney's "The Little Mermaid," Universal's "Oppenheimer," and Warner Bros. "Barbie" as just some of the many films that will drive box office dollars.

"This is just a bevy of riches on the way at the multiplex," he said.

According to the latest data from Comscore, total domestic box office grosses have hit $2.85 billion so far this year, 23.3% below 2019's $3.74 billion over that same time period.

For context, the 2022 domestic box office brought in an estimated $7.5 billion, representing a roughly 70% year-over-year increase but still 30% below pre-pandemic levels, when total North American ticket sales hit $11 billion.

But Dergarabedian argued the industry is heading in the right direction with 30 more wide-release films slated for release this year compared to 2022: "More movies more often is my [mission] statement for the industry for 2023."

Currently, the box office is on track to finish off 2023 above $9 billion.

'Lean and mean'

Box office insiders have questioned the longevity of the current theatrical business model as pre-pandemic levels appear harder and harder to reach against the rise of streaming.

As a result, rumors of consolidation within the industry have skyrocketed, especially following Cineworld's chapter 11 bankruptcy filing and AMC's shaky balance sheet.

"This has become a leaner, meaner business," Dergarabedian said. "Whether or not we get back to $11 billion domestically or over $40 billion globally for movie theaters, I don't know that that's really the point."

Rather, the analyst reiterated it's all about how "lean and mean" the business is in terms of operational efficiencies and filling seats.

AMC (AMC), the world's largest theater operator, reported better-than-expected earnings last week as "Avatar 2" and Marvel's "Ant-Man" sequel helped improve overall attendance in the first quarter.

The company has also been experimenting with more premium options to help lift revenues, like charging extra for certain seat selections.

"With moviegoers continuing to trend toward premium screens and concessions, it stands to reason that as volume normalizes, theater-level revenue could exceed pre-pandemic levels," Wedbush analyst Alicia Reese wrote in a note following the report.

AMC shares, up about 50% year-to-date, remain more than 50% below 2022 levels. Worth noting, however: The stock is more volatile compared to its peers due to its prominent role in the meme stock collapse.

Shares of competitors IMAX (IMAX), and Cinemark (CNK) are up roughly 30% and 18% compared to the year-ago period, respectively.

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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