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Greg Marcus[/caption]
Milwaukee-based
Marcus Corp. ended what began as a challenging fiscal 2024 on a high note thanks to a strong fourth quarter.
The operator of movie theaters, restaurants and hotels reported net earnings of $1 million, or 3 cents per share, for the fourth quarter, compared to a net loss of $1.4 million for the same period in fiscal 2023. Total revenues for the fourth quarter were $188.3 million, up 16.6% from 2023.
For the full year, revenues were flat at $735.6 million, seeing an only 0.8% increase from fiscal 2023. And ultimately, the company reported a net loss of $7.8 million, or 25 cents per share, for fiscal 2024, compared to net earnings of $14.8 million for fiscal 2023. Marcus cited $16.7 million, or 52 cents per share, of debt conversion expense and related tax impacts of the previously announced convertible senior notes repurchases as a contributor to the full-year loss.
Marcus Corp. CEO
Greg Marcus said the company's theater division exceeded expectations and benefitted from a stronger slate of films in the second half of the year, as the industry recovered from the four-month WGA and SAG-AFTRA labor strikes in 2023. Meanwhile, the hotels and resorts division outperformed the industry in the fourth quarter as it "continued their consistently strong performance, resulting in a record year."
"After enduring the expected box office headwinds in the first half of the year, we exited 2024 with growing momentum and continued confidence in both businesses thanks to a stronger slate of highly anticipated wide release films expected in our theatre division and improvements in group bookings and mid-week occupancy in our hotel division," said Marcus said.
For the fourth quarter,
Marcus Theatres' revenues were up 22.9%, comparable theater admission revenues were up 15.4% and comparable theater attendance was up 29.1%. Driving second-half momentum for the division was a slate of high-grossing blockbuster films, including "Inside Out 2," "Deadpool & Wolverine," "Wicked," "Moana 2" and "Despicable Me 4." Full-year revenue for the division fell slightly from the prior year.
In an effort to continue driving foot traffic to theaters, Marcus in November launched the Marcus Movie Club. For $9.99 per month, moviegoers who join Marcus Movie Club will receive a credit to see any 2D movie each month, get a 20% food and beverage discount, have unlimited access to additional tickets for $9.99, and pay no digital convenience fees, according to a press release.
For the fourth quarter,
Marcus Hotels & Resorts saw total revenues before cost reimbursements increase 5.4%, and revenue per available room, or RevPAR, increased 3.6% at comparable company-owned hotels.
Improvements in group bookings, higher occupancy and average daily rates as well as the
positive impact of the 2024 Republican National Convention were cited as key drivers of the division's record results, said Michael Evans, president of Marcus Hotels & Resorts.
Held from July 15-18 in Milwaukee, the RNC provided a major boost to the Marcus Hotels & Resorts division. Hotels in downtown Milwaukee, including Marcus’ Pfister Hotel, Hilton Milwaukee City Center hotel and Saint Kate–The Arts Hotel, were booked solid during the RNC with demand for rooms so high that hotels were able to greatly increase their room rates during the convention.
“As we look ahead, group booking trends are above pre-pandemic levels and we are seeing encouraging improvements in weekday occupancy growth," said Evans. "Our commitment to operational excellence and delivering an exceptional guest experience helped deliver our record results in 2024, with our award-winning properties poised for continued growth and impact in the year ahead."
Group booking pace for fiscal 2025 is running ahead of pace compared to the same period in fiscal 2024, and significantly ahead of pace when excluding the impact of the RNC. Fiscal 2026 booking pace is also running significantly ahead compared to the same period a year ago. Banquet revenue is running similarly ahead of the same time last year, with catering revenue running slightly behind for 2025 but ahead for 2026, according to the release.
Also in the fourth quarter,
Marcus announced and began its most extensive renovation in company history at the Hilton Milwaukee. The $40 million project will upgrade the hotel’s lobby, guest rooms and 34,000 square feet of meeting and event space; the guest room renovation began in the fourth quarter of 2024 and is expected to be substantially complete in the first half of 2025, with ballrooms and meeting space renovations substantially complete by late summer 2025. The Hilton Milwaukee is located across Wisconsin Avenue from -- and connected via skywalk to -- the newly expanded Baird Center.
While all 554 guest rooms in the historic hotel’s original footprint will be renovated, the remaining 175 rooms located in the west tower — added to the building in 2000 — will no longer be utilized and eventually removed from inventory. The company has said the decision not to renovate all guest rooms and reduce inventory was based on “current hotel market conditions, projected room supply and demand and the risks associated with proposed new hotel room supply that will require significant public subsidy.”
In explaining the decision further,
Greg Marcus told BizTimes in December that he's concerned about the health of the downtown hotel market and the potential of another third convention headquarters hotel entering the market, one that would likely require public subsidy.
“We’re making investment decisions that last many, many years, and I can’t make an investment decision that’s going to last years where someone’s talking about coming in and subsidizing a competitor,” Marcus said.
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