Six Flags attendance tanks as ticket prices soar — but big investor backs CEO

Six Flags said customers are fleeing in droves nationwide as the theme-park giant hikes ticket prices — but its stock surged after a major shareholder signaled it was backing the company’s controversial new boss.

The Arlington, Texas-based chain revealed Thursday that attendance tumbled 33% to 8 million in the quarter ended Oct. 2 compared to a year ago, which dragged down revenues by 21% to $505 million while net income was down 26% 10 $116 million from $157 million. 

“The attendance trend in September was significantly down from July and August,” chief financial officer Gary Mick said on the call. 

That was largely because of a sharp increase in prices, management admitted. Instead of weaning park goers off of the discounts, the company’s CEO Selim Bassoul, who took the helm a year ago, aggressively raised prices this year and introduced a barrage of new, confusing season passes.

“I think we got it wrong at first,” Bassoul conceded on Thursday. “A segment of our guests experienced sticker shock,” and we “permanently lost a segment of our guests who came on free or heavily discounted tickets.”

“We have heard from guests that our pricing structure is complex and confusing,” Bassoul added.

The company was forced to reverse course – at least temporarily – offering dirt cheap season passes this fall for as low as $40 to customers who renewed their memberships, Mick said.

Nevertheless, Six Flags shares were up by more than 15% to about $22 on Thursday after the company announced that activist investor H Partners increased its stake in the company to 20% from 15%.

“We believe that meaningful change takes time to implement, and we are encouraged by the early signs of progress on this ambitious journey,” Arik Ruchim, a Partner at H Partners and director on the Six Flags Board said in statement.

On his last earnings call with investors in August, Bassoul stirred controversy when he partly blamed the company’s’ weak financial performance on “rowdy teenagers,” describing the amusement parks as “cheap daycare centers.” 

Management did not address a backlash against the company stemming from Bassoul’s loose lipped remarks this summer about wanting to improve the caliber of Six Flags’ customers from those who shop at Walmart to people who shop at Target. 

A the time, current employees and customers took to social media calling for Bassoul’s ouster and threatened to stop going to the parks.

On Thursday, he signaled that rowdiness at the parks — which occasionally has turned violent — has eased. Bassoul said it was “beautiful to watch…our teenagers enjoying the rides and having fun and mingling with their friends,” during his visits to the parks over the past few weeks.

Nevertheless, Six Flags is steadily losing customers and doesn’t expect the trend to reverse itself until next year, when its 27 parks will have more bells and whistles, better landscaping, technology and special events, Bassoul told investors on the call.

Management blamed high gas prices and other inflationary pressures for the steep decline in attendance. 

Bassoul said the “inflationary environment created a unique opportunity to raise our prices,” but dodged a question from an analyst who asked for more details about how the “Inflationary environment [was] beneficial to you guys.”