SeaWorld shares sink to record low as attendance keeps falling

SeaWorld shares sank to a record low on Thursday after the controversial aquatic theme park company reported further falls in attendance and profits.

The company, which induces killer whales, dolphins and sea lions to perform tricks to entertain the public, said 494,000 fewer people visited its parks in the three months to the end of June compared with the same period a year earlier.

The 7.7% drop in attendance, from 6.5 to six million, knocked more than $16m off SeaWorld’s quarterly earnings and spooked analysts and investors, sending the company’s shares down 14.2% to $12.74 by 11am – a record low.

Joel Manby, SeaWorld’s chief executive, who had promised investors that the company would return to growth following a major turnaround strategy announced last year, was forced to apologise to shareholders for the “disappointing” results on a conference call.

The decline was so severe that the company was forced to warn investors that its full-year profits would come in about $25m lower than it had forecast just three months ago. The company said it expected 2016 earnings before interest, taxes, depreciation and amortization (EBITDA) to be in the range of $310-340m compared with its forecast in May of $335-360m. Before the last profits warning analysts had been expecting earnings of $380m.

Manby once again promised that he would take “very urgent” action and that the company’s leadership was “intensely focused”. He said the drop in attendance was mostly caused by a decline in Latin American visitors to its Florida parks, not more customers joining a boycott of the company following widely publicised claims of alleged mistreatment of its animals.

“Brand issues are abating,” Mandy said on the conference call. “I think our California and Texas results show that. We have a Florida problem.”

SeaWorld, which last November unveiled a major brand overhaul to refocus itself from circus trick-style entertainment to conservation, had seen attendance drop by almost a fifth in San Diego. The company did not break out attendance figures for its parks but said California revenue was down 2%, an improvement on an 8% drop last year. In Texas revenue was up 2% compared with down 17% last year.

Last year, Mandy announced that SeaWorld would end the “theatrical killer whale experience” by the end of 2016, but only at the San Diego park that was suffering most from the boycott promoted by Blackfish, an 2013 documentary film that raised concerns about the treatment of SeaWorld’s animals and trainers.

“We are listening to our guests, evolving as a company, we are always changing,” Manby said as he unveiled the new corporate strategy in November. “In 2017 we will launch an all-new orca experience focused on natural environment [of whales]. 2016 will be the last year of our theatrical killer whale experience in San Diego.”

The company went further in its efforts to win public opinion by ending the captive breeding of orca whales, after years of pressure from animal rights activists. “By making this the last generation of orcas in our care and reimagining how guests will experience these beautiful animals, we are fulfilling our mission of providing visitors to our parks with experiences that matter,” Manby said in March.

However, the company still has almost 30 killer whales, including one who is pregnant. The whales can live for up to 60 years.

Peta, the main animal rights charity campaigning against SeaWorld, said it expected SeaWorld attendance to continue to decline despite the company’s recent efforts to improve the treatment of whales and improve its brand image.

“SeaWorld is losing more and more visitors every month because public opposition to confining marine mammals to concrete tanks – where they are slowly driven insane, grinding their teeth down to nubs on the metal bars and floating listlessly in just feet of water – is at an all-time high,” Tracy Reiman, Peta’s executive vice-president said. “Meanwhile, Peta has continued its relentless campaign against SeaWorld all summer.”

SeaWorld’s shares have lost 35% of their value so far this year, and more than two-thirds since the release of Blackfish in July 2013.