Six Flags’ turnaround could take a while
CNBC’s Jim Cramer weighed in on Monday Six Flags‘ prospects say the amusement park giant could eventually improve its business if it works with its activist investor.
“While Six Flags’ new management may be able to turn things around with the help of Jana Partners and Travis Kelce, I wouldn’t stick your nose in this unless you’re willing to be incredibly patient because it’s going to take some time,” he said. “And if the weather is bad or the parks continue to experience operational issues, there’s always a chance the company won’t be able to make it.”
Last month, activist investor Jana announced that she was partnering with Kansas City Chiefs football player Travis Kelce and several others to acquire a roughly 9% stake in Six Flags.
Cramer suggested that Six Flags was facing macroeconomic headwinds as well as company-specific issues, leading to disappointing earnings.
He said business was hurt by a broad decline in consumer spending, especially among lower-income earners. Bad weather such as severe storms and heat waves early in the season also hindered attendance, Cramer said, as the company had to close parks for several days.
Cramer noted that one of the company’s new vehicles, which was expected to attract a lot of attention, broke down several times over the summer, an incident that left passengers hanging in the air. He also noted that Six Flags has delayed the opening of new rides at several locations, including New Jersey and Massachusetts parks. Cramer said Six Flags’ merger with peer Cedar Point did little to benefit the business overall, arguing that more than a year after the deal, there was no meaningful improvement in attendance. He said low attendance led to weakened sales of food, beverages and other add-ons.
Cramer emphasized that the return will not be easy. He said the company needs to clean up its balance sheet, perhaps close underperforming parks and collaborate with Jana. But he said Jana’s arrival was a good sign. out for support Six Flags’ recent CEO change.
“Jana has a great track record, maybe Kelce can get on top of Taylor Swift’s fan base, Chiefs fans,” he said. “I’m a little more optimistic about Six Flags, given that they like the new CEO, especially with gas prices falling sharply.”
Six Flags declined to comment.
