Why Six Flags Entertainment Stock Lost 11% in March

What happened

Six Flags (NYSE: SIX) stock trailed the market last month by shedding 11% compared to a 1.8% uptick in the S&P 500, according to data provided by S&P Global Market Intelligence.

The decline put the theme park specialist at a one-year low, with shares down nearly 20% in the past 52 weeks.

So what

Two events weighed on shares last month. First, investors continued digesting fiscal fourth-quarter results that, while securing the company's ninth consecutive year of record sales, still failed to meet expectations. Shareholders were also rattled by news that CEO James Reid-Anderson plans to retire by early next year. Six Flags credits him with setting a new strategic direction for the company and helping boost key operating and financial metrics.

Now what

Six Flags is on the hunt for a new chief executive, and so shareholders will have to accept extra uncertainty until they learn more about Reid-Anderson's successor. The good news is the new boss isn't facing significant operating challenges, given that attendance rose 5% last year and in-park spending also ticked higher by 2%. These gains don't remove the risk associated with investing in a cyclical industry like theme parks, but they do show that Six Flags has many levers it can pull to keep earnings rising while the economy expands.

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Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.