Marcus Corp. earnings take a dip during screen upgrades

Second quarter earnings down 5.3%

Last updated on July 2nd, 2019 at 09:32 am

Despite big ticket sales for films like The Martian and The Hunger Games: Mockingjay – Part 2, Milwaukee-based The Marcus Corp. reported today that a weaker overall film lineup and a number of screens out of service for upgrades led to a dip in second quarter earnings.

The Marcus Corp. reported second quarter net earnings attributable to the company of $4.95 million, or 18 cents per share, down about 5.3 percent from net earnings of $5.2 million, or 19 cents per share, in the second quarter of the previous fiscal year.

Operating income was $10.6 million for the second quarter, down 9.2 percent from operating income of $11.6 million for the second quarter of the previous fiscal year.

Total revenue for the quarter was $115.7 million, down a bit from $116 million in the second quarter of the previous fiscal year.

However, the company’s results for the first half of the fiscal year look better. Net earnings attributable to the company were up 11 percent to $19.6 million, operating income was up 6.1 percent to $36.4 million and total revenues were up 6.9 percent to $264.9 million.

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Despite having several screens out of service for upgrades, Marcus Theatres had record second quarter revenues and record revenues and operating income for the first half of the year.

“Although the theater division had a challenging second quarter, both (the theater and the hotel) divisions still achieved record operating income for the first (half of the fiscal year),” said Greg Marcus, president and chief executive officer of The Marcus Corp. “Second quarter results for Marcus Hotels & Resorts benefited from a higher average daily rate and strong cost controls, which helped to offset the impact of a weaker film slate and a significant number of screens out of service for upgrades for Marcus Theatres.”

Despite having “an unprecedented number of screens out of service (for upgrades),” Marcus Theatres had record second quarter revenues and record revenues and operating income for the first half of the year, Marcus said.

The company pushed ahead with the screen upgrades in preparation for today’s opening of Star Wars: The Force Awakens.

“We recently added 17 newly renovated premium large format screens with DreamLounger recliner seating to our circuit,” said Rolando Rodriguez, president and CEO of the Marcus Theatres division. “We now offer premium large format screens in more than 61 percent of our company-owned, first run theaters, which we believe is the highest percentage among the top chains in the industry. This positions us very well to capitalize on what is expected to be a record-breaking performance for the highly anticipated sequel to the epic Star Wars series.”

Marcus Theatres is in the process of renovating five additional theaters, each with DreamLounger recliner seating and selected food and beverage outlets. Those renovations, plus two new UltraScreen auditoriums also under construction, are scheduled to be completed during the first half of 2016.

In November, Marcus Theatres opened the Midwest’s first 4-D movie theater at its Gurnee Mills Cinema in Gurnee, Ill.

The Marcus Hotels & Resorts division also had record operating income for the second quarter (up 33.1 percent) and the first half of the fiscal year (up 14.4 percent), said Joseph Khairallah, chief operating officer of the Marcus Hotels & Resorts division.

Revenue per available room for company-owned hotels was up 2.4 percent in the second quarter.

The company completed the sale of the Hotel Phillips in Kansas City, Mo. during the second quarter.

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Andrew is the editor of BizTimes Milwaukee. He joined BizTimes in 2003, serving as managing editor and real estate reporter for 11 years. A University of Wisconsin-Madison graduate, he is a lifelong resident of the state. He lives in Muskego with his wife, Seng, their son, Zach, and their dog, Hokey. He is an avid sports fan and is a member of the Muskego Athletic Association board of directors.

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