The third quarter of fiscal 2023 was especially fruitful for The Marcus Corp., which recorded positive growth in revenue, operating income and net earnings, thanks in large part to recent blockbuster films “Barbie” and “Oppenheimer.”
The Milwaukee-based operator of hotels, movie theaters and restaurants nearly quadrupled its Q3 earnings, from $3.3 million ($0.10 per diluted share) in 2022 to $12.2 million ($0.32 per diluted share) in 2023. Total revenues were up 13.7% over last year at $208.8 million.
For the first three quarters of fiscal 2023, Marcus Corp. reported earning of $16.2 million, compared to losing $2.7 million during the same period last year.
Theater division soars
“Marcus Theatres led the way with the box office phenomenon Barbenheimer, along with the surprise hit, ‘Sound of Freedom,’ delivering strong performances and impressive attendance growth at theatres across our circuit,” said Greg Marcus, chairman, president and chief executive officer of The Marcus Corp.
Thanks to the success of Q3’s top five highest-performing films — “Barbie,” “Oppenheimer,” “Sound of Freedom,” “Indiana Jones and the Dial of Destiny” and “Mission: Impossible – Dead Reckoning Part One” — theater attendance grew 15.6%, which drove admission revenues per person up nearly 13% and average concession food and beverage revenue per person up more than 6%. Overall revenue for the division grew 25%.
As the entertainment industry continues to recover from the pandemic’s financial devastation — and adjust to consumers’ ever-changing preferences and expectations — the recent craze for films like Barbie and Oppenheimer was an unexpected yet welcome change of pace and a reminder of “the power of theater exhibition and the awareness of great movies,” said Greg Marcus during the company quarterly earnings call Wednesday.
Meanwhile, the ongoing actors strike in Hollywood threatens to slow down some of the momentum the film industry has gained coming out of the pandemic. The labor dispute between the American actors’ union SAG-AFTRA and the Alliance of Motion Picture and Television Producers recently surpassed 110 days, with a deal apparently on the horizon, according to national reports. While the strike has cause significant delays in the 2024 film slate, Greg Marcus views it as a “short-term” hurdle.
“The disruption from the strikes is not helpful. As expected, there have been shifts in the release calendar and we will not have better visibility on the ultimate impact on the 2024 film slate until the strike is settled and film production resumes,” he said. “At the end of the day, this remains a short-term supply chain disruption. The product isn’t going away or skipping theatrical exhibition, it’s getting moved around and shifted out. With the writers strike settled the beginning of the supply chain is working again, restocking the script inventory. We’re encouraged by the very active negotiations in the last week between the screen actors guild and the studios, and while we have no insight on the discussions, were cautiously optimistic for a resolution in the near term.”
In the meantime, the release of “Taylor Swift: The Eras Tour” has the fourth quarter already off to a strong start with steady growth over last year. The concert-film debuted as the second-highest October opening weekend of all time for any kind of movie, said Marcus.
“Eras is an example of the breadth of content we can play,” he added.
Hotels remain steady
On the hotels and resorts side of the business, room revenue in Q3 was $36.5 million, a slight decrease from last year’s $36.9 million. However, revenue per available room increased at six of seven comparable company-owned hotels.
Group booking pace for fiscal 2023 and fiscal 2024 are running ahead of comparable pace compared to 2022. Banquet and catering booking pace for fiscal 2023 and 2024 are also ahead of last year’s.
“The third quarter is typically our strongest given the peak summer leisure travel season, and this year was no different,” said Michael Evans, president of Marcus Hotels & Resorts. “Group demand continues to grow and we are capitalizing on our newly renovated meeting spaces with event bookings. Our strong commitment to operational excellence and exceptional service, combined with our continued investment in our award-winning properties, ideally positions our hotels and resorts to stand out within the markets where they compete.”
In July, The Pfister Hotel in downtown Milwaukee began a $20 million renovation project, focused on modernizing its ballrooms and meeting spaces, guest rooms in the hotel’s historic tower and its lobby, lobby bar and Café at the Pfister. In addition, the Grand Geneva Resort & Spa in Lake Geneva recently announced the continuation of its multi-phased renovation at the iconic resort.
