The Marcus Corp. finished 2023 strong, with operating income soaring 308.5% over fiscal 2022.
The Milwaukee-based hotel and movie theater company on Thursday reported results for the fourth quarter and fiscal year 2023, including annual net earnings of $14.8 million (46 cents per diluted common share), compared to a net loss of $12 million (39 cents per diluted common share) for fiscal 2022. Total revenues for the year rose 7.7% to nearly $730 million.
“Our fiscal year 2023 results marked another year of significant growth as both Marcus Theatres and Marcus Hotels & Resorts continued to drive operational excellence at our movie theaters and our hotels and resorts,” chief executive officer Greg Marcus said in a statement.
While the company churned strong results for the year as a whole, the fourth quarter was likely not the main driver. Revenues for Q4 were down slightly at $161.5 million, compared to $162.9 million for the same period in 2022, and the company recorded a quarterly net loss of $1.4 million. That’s an improvement over a $9.3 million net loss during the same period in 2022.
Theater division holding strong
The impact of several blockbuster films, including “Barbie,” “Oppenheimer,” “Taylor Swift: The Eras Tour” and “Avatar: The Way of Water,” was starkly evident in Marcus Theatre’s yearly results, driving revenue up 12.4% over fiscal 2022. The division’s operating income ballooned 346.9% to $36.2 million — from $8.1 million in fiscal 2022 — and adjusted EBITDA grew 44.1% to $86.4 million.
Resultant of new price optimization strategies rolled out last year, Marcus Theatres saw a 10.9% jump in average ticket price and a 5.2% jump in average concession revenue per person year-over-year.
These growth drivers helped offset the closures of three underperforming, Milwaukee-area cinemas in September. Despite that move, Q4 revenue rose slightly and operating income was $3.5 million, compared to $421,000 for the same period of fiscal 2022.
The traditional cinematic experience may be having a moment in a post-pandemic world, but Marcus plans to continue leaning into “alternative” programming to keep customers of all generations engaged.
“As we have long said, our theaters are entertainment destinations that offer unforgettable experiences not available at home,” said Mark Gramz, president of Marcus Theatres. “The success of ‘Taylor Swift: The Eras Tour’ concert film, along with other non-traditional programming like live events, sports and musical theater, create new opportunities to enjoy unique experiences with the clearest sound, most vivid screens, comfortable amenities, and exciting food and beverage options.”
Big year ahead for hotels
Marcus’ hotel division continues to recover from a slow return to business travel post pandemic. For the full year fiscal 2023, comparable hotels revenues increased 6.3% over fiscal 2022 and comparable hotel revenue per available room grew at all seven company-owned hotels, increasing 8.4% for fiscal 2023.
Operating income for the year was down 6%, largely due to costs of several major projects including a multi-phase renovations of The Pfister Hotel in Milwaukee and the Grand Geneva Resort & Spa in Lake Geneva. In addition, Timber Ridge Lodge & Water Park, located on the same resort campus as Grand Geneva Resort & Spa, unveiled new experiences at its Moose Mountain Falls indoor waterpark in November 2023.
“We are pleased with our fourth quarter and fiscal 2023 results as leisure travel remains healthy and group and business travel continue to steadily approach pre-pandemic levels,” said Michael Evans, president of Marcus Hotels & Resorts.
So far, group booking pace for fiscal 2024 is ahead of last year at this time — and that doesn’t include the sellouts of Marcus’ downtown Milwaukee hotel properties during the 2024 Republican National Convention in July.
“We have much to look forward to in fiscal 2024 with renovations at The Pfister Hotel and Grand Geneva Resort & Spa – two of our iconic company-owned properties – nearing completion and the Republican National Convention coming to Milwaukee this summer as the city’s new expanded convention center opens,” Evans added.
