Investors continue to flock to the nation’s theatres to escape the heat and take their mind off the stock market. The weekend box office rose 29.8% according to BoxOfficeMojo.com based on the gross of the top 12 films. This marks the fifth straight and sixth of the last seven weekends with significant year-over gains. Quarter to date the box office is very healthy with receipts up 17%, while the year-to-date gain has now risen to 7%.
Similar gains should hold through next weekend as there is one remaining picture expected to open strongly, Superbad from the team behind the 40 Year Old Virgin and this summer’s surprise hit Knocked Up. In addition, The Bourne Ultimatum is showing good legs and although it opened below expectations at $50 million, Rush Hour 3 will have one more another sizable weekend even with a sharp 60% decline. After next weekend, the year-over year gains should moderate but the summer record is sure to fall and analyst estimates for 3Q admissions revenue at the major theatre chains are sure to be too low.
Regal Entertainment shares have bounced back over 3% from the heavy selling that occurred on Thursday. I still think the shares can bounce further and the 5.5% current yield makes the shares a good defensive investment if the market again suffers heavy losses.