Milwaukee-based Marcus Corp. continues to feel the affects of the four-month WGA and SAG-AFTRA labor strikes last year, evidenced by a 15% drop in revenues and a net loss of $20.2 million in the second quarter of fiscal 2024.
Total revenues for the second quarter were $176 million, compared to $207 million for the second quarter of fiscal 2023. And the quarter’s $20.2 million net loss (or 64 cents per diluted common share) compares to earnings of $13.5 million (or 35 cents per diluted common share) for the same period last year.
The company attributed the loss to $15 million, or $0.47 per share, of debt conversion expense and related tax impacts of the previously announced convertible senior notes repurchases. Excluding the impacts of the convertible senior notes repurchases, net loss was $5.2 million for the second quarter of fiscal 2024.
Theaters lagging due to actors strike
Marcus Theatres’ total revenue fell 26% to $101.5 million in the second quarter, and both operating income and adjusted EBITDA were also down due to decreased attendance. Average ticket price decreased 3.1% with an increase in promotions and a higher percentage of attendance on Value Tuesday, while average concession revenues per person increased by 2.3%.
The division likely took the brunt of the hit from the 2023 Hollywood labor strikes in the first quarter of this year, with very few blockbuster films opening from January through March. While the impact continued in April and May, “there was a notable positive shift in June and we ended the quarter with much stronger momentum,” said Greg Marcus, chief executive officer of The Marcus Corp.
He noted the success of new blockbuster releases “Inside Out 2,” which debuted June 14 and has since become the highest grossing animated movie ever, and “Deadpool & Wolverine,” which opened July 26 (after quarter close), as well as other strong performances from recent films like “Despicable Me 4” and “Twisters,” as a sign of steady demand for the movie theater experience.
“We continue to see an improving film slate with several highly anticipated new wide releases this fall such as “Beetlejuice Beetlejuice” and “Joker: Folie a Deux,” along with a number of exciting films slated for the remainder of the year,” said Mark Gramz, president of Marcus Theatres.
Hotels and resorts benefit from return in group bookings
Led by strengthened demand for group bookings across its 16 hotel properties, revenue from Marcus’ hotel division in Q2 increased 5.6% year-over-year, while revenue per available room, or RevPAR, increased 6.5%. Continued improvements in group business drove occupancy growth of 4.5 percentage points during the second quarter of fiscal 2024.
“Total occupancy neared pre-pandemic levels during the second quarter of fiscal 2024, driven by strong group demand, especially on weekdays, and the start of the peak travel season,” said Michael Evans, president of Marcus Hotels & Resorts.
He highlighted the impact of the 2024 Republican National Convention on Marcus’ three hotel properties — The Pfister, Saint Kate and Hilton Milwaukee City Center — in hosting thousands of guests for five sold out nights in mid-July.
Group booking pace for the remainder of fiscal 2024 is running ahead of comparable pace during the same period last year, even when excluding bookings related to the RNC. Fiscal 2025 booking pace is also running significantly ahead compared to the same period last year, with banquet and catering revenue pace running similarly ahead, the company said.
Meanwhile, The Pfister is in the final phases of a $20 million reinvestment, with finishing touches continuing in the hotel’s lobby and ground-floor public spaces. The lobby restoration, expected to be complete this summer, follows the full revitalization of The Pfister’s ballrooms, meeting and event spaces, and historic guest rooms, which were completed in September 2023.
