Shares of AMC Entertainment spiked more than 14% on Wednesday, after the company said it expects to reopen theaters globally in July after shutting them down in mid-March due to the coronavirus outbreak.
In an earnings call Tuesday, the world's largest movie theater operator said it plans to reopen almost all its U.S. and U.K. theaters in time to showcase Christopher Nolan's "Tenet," slated for release on July 17, and Disney's "Mulan" on July 24.
Also on Tuesday, Sony announced it would release the Selena Gomez-led romantic comedy "The Broken Hearts Gallery" on July 10. In late March, the studio had pushed the majority of its film slate to 2021, suggesting a lack of confidence that movie theaters would be able to reopen in mid-summer.
The addition of "The Broken Hearts Gallery" to the release calendar shows a new sense of confidence in not only the ability for theaters to reopen, but the expectation that consumers will return with pent-up demand.
AMC, which also operates Odeon Cinemas, recently reopened some theaters in Norway.
"Even though those three theaters were limited in ticket sales to 25% of seat capacity, we sold 83% of our available seats this past weekend," Adam Aron, CEO of AMC, said.
The company also saw strong sales of food and beverages, he said.
Still, analysts are tepid in their expectations.
"We remain cautious on the company's outlook as well as that of the industry ahead of theater re-openings in the coming weeks—with continued focus on how receptive consumers are to returning to theaters, how robust the film slate remains, and the level of impact from attendance restrictions," Eric Wold, analyst at B. Riley FBR Research, wrote in a research note Wednesday.
Upon reopening, AMC will operate at a limited capacity and block off seating to maintain safety, alongside other precautionary measures.
AMC's stock made gains Wednesday, a week after it flagged "substantial doubts" about its ability to continue operations if it were forced to keep its theaters closed for an extended period of time.
The company is conducting "exhaustive analysis" of its theaters to determine which ones will remain shuttered permanently due to lack of profitability.
In the first quarter, AMC's total revenue fell nearly 22% to $941.5 million, missing analysts' estimates of $951.4 million, according to Refinitiv data. Additionally, the company's net loss widened to $2.18 billion.
CORRECTION: This article has been updated to correct that Refinitiv analysts expected AMC to have $951.4 million in revenue in the first quarter.