Six Flags Entertainment Corporation's Disappointing Earnings Spark Jim Cramer's Criticism

Jim Cramer criticized Six Flags Entertainment Corporation's (FUN) second-quarter earnings report, calling it a "horrendous" operator with a disappointing Q2 report. The company cut its operating income guidance to $885 million from $1.10 billion and predicted half a million fewer visitors to its theme parks. Cramer expressed his dissatisfaction with the performance and has previously expressed skepticism about the company.

Six Flags Entertainment Corporation (FUN) reported its second-quarter 2025 earnings, revealing a notable miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.99, falling short of the expected $1.03, and reported revenue of $930 million, which did not meet the forecast of $1.03 billion. Following the announcement, Six Flags’ stock dropped by over 19% in pre-market trading, reflecting investor disappointment. According to InvestingPro data, this decline adds to an already challenging year, with the stock down over 36% year-to-date. Five analysts have recently revised their earnings expectations downward for the upcoming period [1].

Key Takeaways
Six Flags reported an EPS of $0.99, missing the forecast of $1.03. Revenue came in at $930 million, below the $1.03 billion forecast. Stock price fell over 19% in pre-market trading. Attendance dropped 12% in the last six weeks of Q2. Q2 adjusted EBITDA guidance reduced significantly [1].

Company Performance
Six Flags faced a challenging quarter, with attendance dropping by 12% in the last six weeks. This decline contributed to the company’s inability to meet revenue expectations. The company has been grappling with macroeconomic factors, including extreme weather conditions, which affected early-season performance. Despite these challenges, Six Flags has been focusing on innovation and operational restructuring to improve long-term performance [1].

Financial Highlights
Revenue: $930 million, down from the forecast of $1.03 billion. Earnings per share: $0.99, below the expected $1.03. Adjusted EBITDA guidance for Q2 reduced to $860-$910 million from $1.08-$1.12 billion. Earnings vs. Forecast The company reported an EPS of $0.99, which was 3.88% below the forecast of $1.03. Revenue also fell short, coming in at $930 million against a forecast of $1.03 billion. These misses highlight the challenges Six Flags faces in maintaining its financial performance amid declining attendance and unfavorable macroeconomic conditions [1].

Market Reaction
Following the earnings announcement, Six Flags’ stock plummeted by 19.15%, with pre-market trading showing a further decline of 12.05%. This sharp drop reflects investor concerns over the company’s ability to meet financial targets and manage its debt, which currently stands at a net debt to adjusted EBITDA ratio of 6.2x, above the target of sub-4x. InvestingPro analysis indicates the stock is currently undervalued, with analyst targets ranging from $30 to $60 per share. The company’s financial health score stands at "FAIR," though its current ratio of 0.37 suggests potential liquidity challenges [1].

Outlook & Guidance
Looking ahead, Six Flags expects flat attendance in the second half of 2025, with in-park spending anticipated to decrease by 3%. The company aims to reduce costs by $90 million in the second half of the year. Capital expenditures for 2025 are projected to be between $475 million and $500 million, with a reduction to $400 million planned for 2026. Despite current challenges, InvestingPro data shows analysts expect revenue growth of 23% for FY2025, with the company projected to return to profitability this year [1].

Executive Commentary
CEO Richard Zimmerman expressed confidence in the company’s strategy, stating, "Our company is strong, our strategy is sound, and the opportunities are real." CFO Brian Witherow added, "We are building a better business with a more stable cost structure" [1].

Risks and Challenges
Declining attendance due to macroeconomic factors and extreme weather. High net debt to adjusted EBITDA ratio, posing financial risk. Consumer behavior shifting towards value-conscious spending. Operational challenges from recent organizational restructuring. Potential impact of CEO succession process on strategic direction [1].

References
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-six-flags-q2-2025-sees-stock-tumble-after-earnings-miss-93CH-4173979