Credit: Six FlagsThe Six Flags summer from hell just keeps getting worse. With attendance down, revenue falling, and its CEO resigning, the company formed from the combination of Cedar Fair and Six Flags last year could have done without another blow to its morale.
During its first quarter earnings report this year, Six Flags Entertainment, the largest theme park company in North America, told investors that attendance declined 17 percent. At the time, CEO Richard Zimmerman told investors that inclement weather was to blame for the slow start to the season, as rainstorms nationwide slowed guests’ visits to the parks.
Earlier this month, Zimmerman told investors that Six Flags saw a $100 million decline in revenue during the second quarter, a nine percent decline in attendance, and an eight percent decline in season pass purchases. Before announcing the numbers, Zimmerman told investors he would be stepping down as CEO as soon as the Board could find a replacement.
The quarter’s decrease in attendance reflects a drop in single-day ticket sales, fewer sales of season passes and memberships, and lower renewal rates on season passes. Exogenous events such as poor weather and a challenged consumer across most North American markets negatively impacted the sales cycle.
Now, with these headwinds, the company is facing an investor lawsuit that could upend it forever. Los Angeles-based Schall Law Firm said it is investigating whether Six Flags issued false or misleading statements or failed to disclose losses to its investors.
Six Flags did not respond to a request for comment on the lawsuit, but a company spokesperson did point out that attendance began to normalize in July as the weather improved nationwide.
Since the start of the year, Six Flags’ stock has been down 47 percent. The company is already closing one park in Maryland, and rumors began to fly that it is considering closing other properties. The combination of Six Flags and Cedar Fair does have some overlap in certain areas, making some parks redundant.
Former Disney Imagineer Jim Shull suggested that Six Flags sell Knott’s Berry Farm to Disneyland to help alleviate some of Disney’s space issues there, and some insiders have even suggested former Disney CEO Bob Chapek as the next Six Flags CEO.
Whatever the next steps for the theme park giant, an investor lawsuit, which would force Six Flags to hand over all pertinent documents, has the potential to be another blow to an already struggling theme park company.
What do you think Six Flags’ future will be? Let us know in the comments.