Under the weight of the ongoing COVID-19 pandemic, Milwaukee-based Marcus Corp. continued to operate at a loss for the third quarter of this year.
The company on Tuesday reported a net loss of $39.4 million for the quarter, compared to net earnings of $14.2 million during the third quarter of 2019. Total revenue for the quarter dropped 84%, with Marcus' theater division taking the greatest hit.
Marcus Theatre admissions during Q3 generated $3.1 million in revenue, which is down 95% from $69.7 million last year.
According to a news release, Marcus Theatres had reopened 80% of its 90 locations in late August in time for the release of the quarter’s highest grossing films: 'Tenet,' 'The New Mutants,' and 'Unhinged.' But as the film release schedule continued to change, it temporarily closed 17 previously reopened cinemas in early October and has since reopened four of those locations.
As of Tuesday, 66% of Marcus Theatres' footprint is operational, with the remainder slated to open "as soon as market conditions allow." Without new releases, Marcus is bringing back seasonal classics like 'Casper' and 'Monsters Inc.' and blockbusters such as 'Harry Potter.'
Of Marcus Theatres' 13 southeastern Wisconsin locations, eight have reopened including Bistroplex in Greendale, Movie Tavern in Brookfield, North Shore Cinema in Mequon, Majestic Cinema in Waukesha, Ridge Cinema in New Berlin, Renaissance Theatre in Sturtevant, Sheboygan Cinema in Sheboygan, and South Shore Cinema in Oak Creek.
While revenues for Marcus Hotels & Resorts were down 71%, the division has had a smoother revamp process. After three more hotels reopened during the quarter, almost all eight of the company-owned hotels have resumed full operations. Saint Kate - The Arts Hotel, one of Marcus' three downtown Milwaukee hotels, is slated to reopen its guest rooms on Nov. 5. Its ground-floor amenities have been open since July.
Nine out of 10 managed hotels and other properties have also reopened, along with the majority of the company’s restaurants and bars.
Many group bookings that were cancelled this year due to COVID-19 are being rescheduled for future dates, including the rescheduled Ryder Cup in September 2021. Wedding bookings are also increasing.
"These are challenging times, yet we expect both of our businesses will begin returning to more normal conditions once the pandemic is under control," said Greg Marcus, president and chief executive officer of The Marcus Corp., in a statement.
He said the company has steps to strengthen its balance sheet and liquidity that will help sustain operations throughout fiscal 2021, even if revenues remain limited or if parts of the business have to close again due to the pandemic.
In addition, Greg Marcus noted the value of the company's real estate. Marcus Corp. owns eight hotel properties as well as the majority of its theater locations.
"We believe this remains a significant advantage for us relative to our peers as it keeps our monthly fixed lease payments low and provides significant underlying credit support for our balance sheet," he said. "We also own surplus real estate that may be monetized in future periods if opportunities arise."
A total of 617 Marcus Corp. employees lost their jobs during two rounds of layoffs this summer, in late June and in mid-August, due to the economic downturn caused by the pandemic.
So far, during fiscal 2020, Marcus Corp. has lost approximately $123 million due to the impact of COVID-19, including voluntary closures and government mandated restrictions. At the end of quarter three last year, the company had made a profit of $54.8 million.