It appears Milwaukee-based hotel and movie theater company The Marcus Corp. is taking two steps forward and one step back on its return to pre-pandemic financial performance.
The company recorded a net loss of $9.3 million for the fourth quarter of fiscal 2022, compared to net earnings of $6.4 million for the same period in fiscal 2021. For the full fiscal 2022 year, Marcus Corp. lost a total of $12.0 million, which is improved from a net loss of $43.3 million for fiscal 2021.
While the annual results show drastic recovery from a $124.8 million deficit in 2020 due to the COVID-19 pandemic, quarterly growth has been slower and more sporadic. Fiscal 2022 started off in the red with a net loss of $14.9 million, followed by two consecutive quarters in the black. But now the company finds itself in the red again as consumer behavior continues to shift.
Total revenues for the fourth quarter were $162.9 million, a 3.6% decrease from total revenues of $169 million the prior year. However, the company saw a 48% increase in annual revenue, from $458.2 million in fiscal 2021 to $677.4 million in 2022.
“These results are illustrative of what we’ve been saying for a while, that while we’re clearly on the way back, that road back will not necessarily be a straight line,” said Chad Paris, chief financial officer and treasurer of The Marcus Corp.
The Marcus Hotels & Resorts division had a record year as it “continued to see strong demand for travel and improved conditions for group events, even as we entered a seasonally slower period for our Midwest hotels,” said Paris.
Room revenues were up 20% for the quarter and 38% for the year. In fiscal 2022, the division generated an all-time record $38.9 million in adjusted EBITDA (earnings before interest, taxes, depreciation).
And as group business made a comeback in the second half of the year, the division’s catering and banquet operations continued to drive growth in food and beverage revenues, which were up 34% in Q4 of 2022 compared to prior year.
Group pace improved significantly during fiscal 2022, with the pace for group room revenue for fiscal 2023 now in-line with the pace in pre-pandemic fiscal 2019. For fiscal 2024, the pace of group room revenue is running significantly ahead of the comparable pace at this time last year, according to a news release.
“Revenues, operating income and adjusted EBITDA increased significantly in fiscal year 2022 thanks to strong leisure travel and improving group demand,” said Michael Evans, president of Marcus Hotels & Resorts. “While leisure travel traditionally slows over the winter months in our portfolio, we are pleased with growing levels of group and business travel, especially mid-week.”
The Marcus Theatres division, which has faced a steeper slope to post-pandemic recovery, posted a 16% decrease in admission revenue for the fourth quarter, with attendance decreasing 24% – driven by a reduced number of wide release films debuting during the quarter, said Paris.
Thanks to a boost in 3D movie ticket sales, Marcus Theatres saw a 10% increase in average admission price in Q4. Average concession food and beverage revenue per person also increased by 11.1% in Q4, which was driven by price increases earlier in the year in response to rising inflation. A new food and beverage menu introduced in November was another contributor of higher spending at theater concession stands.
“During fiscal 2022 we took significant steps forward in our recovery as our customers steadily returned throughout the year for a movie watching experience only found in theaters,” said Mark Gramz, president of Marcus Theatres. “This was welcomed news, and while the quantity of wide-release films lagged pre-pandemic levels, consumers of diverse ages and demographics continued to demonstrate that they want to see films of all kinds on the big screen. Looking ahead, we are pleased with the growing number and pace of new and exciting theatrical debuts in 2023.”
“We anticipate continued improvements in both divisions in fiscal 2023 as film studios release a greater and more consistent quantity of exciting wide-release films and travel demand from group and business travel continues to grow,” said Greg Marcus, president and CEO of Marcus Corp.
