AMC Entertainment Holdings is rescripting its real estate playbook after reporting heavy losses in 2025.
The world's largest theater chain said Tuesday it plans to continue aggressively shrinking its portfolio — closing more theaters than it opens — while abandoning expensive ground-up construction.
CEO Adam Aron highlighted the Leawood, Kansas-based company's definitive shift in capital strategy on the company's fourth-quarter earnings call. AMC now views building new theaters as cost-prohibitive compared to taking over existing sites.
"New build theaters are considerably more expensive than what we call spot acquisitions," Aron told analysts.
AMC can acquire theaters where the primary capital investment is already complete, then spend $500,000 to $1 million on upgrades to bring them into the AMC fleet, Aron said.
This "capital-light" approach allows AMC to apply its marketing programs and premium product experiences to existing infrastructure. Aron noted the 2021 lease acquisition of the 14-screen theater at The Grove shopping center in Los Angeles. The theater jumped from the No. 28 highest-grossing theater in the country to No. 5 last year after joining the AMC circuit.
Simultaneously, the chain is pruning its underperforming assets. Since 2020, AMC has closed 213 locations while opening only 65, resulting in a 15% net reduction of its global portfolio.
AMC reported full-year total revenue of $4.85 billion in 2025 compared to $4.64 billion in 2024. It posted a net loss of $632.4 million last year, compared with $352.6 million the year prior. The increase stems primarily from noncash charges associated with a debt restructuring last summer.
The company expects to continue closing more theaters than it opens, focusing on shedding money-losing properties while renegotiating favorable lease terms for high-productivity sites.
AMC plans to maintain a capital expenditure budget between $175 million and $225 million for 2026. Much of this will fund "maintenance capital" and high-return-on-investment upgrades, such as laser projection and extra-wide rocker seating.
To prepare for its 2026 real estate activity, AMC launched refinancings totaling about $2.4 billion of its debt secured by its theater real estate. The refinancings will extend the maturity of that debt from 2027 to 2031, the company said.
Bond rating firm S&P Global Ratings reported Tuesday that it expects AMC to post a moderate improvement in 2026.
"While the [refinancing] transaction will push out AMC's debt maturities, we continue to view its capital structure as unsustainable," S&P analysts wrote. Even with a potential improvement in box office performance, its cash flows will remain constrained by its high fixed charges, including more than $400 million of annual interest expense and $850 million of rent. We expect AMC will modestly improve its operating performance over the next 12 months on strengthening theater attendance."
AMC didn't immediately provide a comment to CoStar News on S&P's remarks.