Merlin Entertainments Group US Holdings: Soft 1Q26 despite easy comps, refi remains elusive

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Merlin Entertainments Group US Holdings: Soft 1Q26 despite easy comps, refi remains elusive

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Merlin Entertainments Group US Holdings

Soft 1Q26 despite easy comps, refi

remains elusive

Earnings Review

Disappointing result reduces likelihood of quick refi 21 May 2026

Merlin Entertainment (MERLLN) reported soft 1Q26, and management offered little High Yield Credit

colour on 27s refinancing or on FY26 guidance. 1Q26 results (the smallest quarter in a United States

year) were disappointing in our view, as Merlin failed to capitalise: 1) easy yoy Media & Entertainment

comparables (1Q25 EBITDA -56%), 2) positive calendar effects (Easter & US K-12 family Mark Xu, CFA

travel earlier). We think this in turn reduces the probability of a front-loaded refinancing, Research Analyst

which forms market bull thesis on long dated paper. As discussed in our initiation report, BofASE+33 1 8770(France)0863

we see a can-kicking 27s refi with backloaded timing as the most likely outcome. We mark.xu2@bofa.com

reiterate Overweight €/$27s and Underweight €30s, $31s, $32s.

Strong LEGO, soft Gateway

During 1Q26 Merlin saw soft consumer confidence due to geopolitical risks, impacting

Gateway attractions performance while Resorts (especially LEGOLAND) continue to

trade well. Visitor numbers on underlying basis +4.2%, and on reported basis were flat

yoy at 10.7m due to Lego Discovery Centre disposals. Revenue -0.1% yoy on constant FX

and -3.9% on reported basis to £297m. Gross profit -1.5% on constant FX and -5.1% on

reported to £237m. Reported EBITDA at £-11m (vs £-1m yoy). EBITDA by region saw

North America -13.9%, UK -192%, International -28.1%. Recall 1Q is typically the

smallest quarter within Merlin’s fiscal year; the summer quarters (2Q & 3Q) are more

important.