Milwaukee-based Marcus Corp. is climbing toward pandemic recovery, thanks in part to an influx of hotel and theater business in June.
For the sixth consecutive quarter since the start of the COVID-19 pandemic, Marcus on Wednesday reported a loss of $23.4 million, or $0.76 per dilute common share, in the second quarter of fiscal 2021.
That’s an improvement from last quarter’s net loss of $28.1 million, or $0.93 per diluted common share. The company still has significant work to do before reaching pre-pandemic levels. For comparison, Marcus recorded net earnings of $18 million during Q2 of 2019.
Still, the company pointed to progress elsewhere, including adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). Marcus’ hotels division recorded positive adjusted EBITDA for the entire second quarter and, for the first time since the start of pandemic, adjusted EBITDA by both divisions and company-wide was in the black.
In addition, second quarter revenues saw an 82% increase from last quarter, totaling $92.5 million. Last year, with most Marcus properties closed, revenues totaled just $7.9 million.
Marcus Corp. attributed its momentum in Q2 to positive cash flow in June as well as industry outperformance by both divisions.
For Marcus Hotels & Resorts, the Milwaukee Bucks’ playoff run to the NBA championship was a huge boost for business, as tens of thousands of local fans and visitors descended upon downtown Milwaukee for both home and away games. Marcus’ three downtown Hotels – The Pfister, Saint Kate and Hilton Milwaukee City Center – reported 100% occupancy during the NBA Finals in mid-July.
Marcus hotels’ overall occupancy rate was 50% for the second quester. Steady hotel demand continues to be driven by “drive-to leisure” customers. The return of weddings and upcoming large-scale events, such as the Ryder Cup in September, have contributed to an increase in weekend group bookings as well as catering and banquet bookings.
“The next step is the gradual reopening of offices in our downtown market, which would likely be accompanied by an easing and ultimately lifting of travel bans that so many business put in place during the pandemic,” said Greg Marcus, president and CEO of Marcus Corp. “While this might be delayed slightly with the recent uptick in (COVID-19) cases, that next step is coming.”
Marcus Theatres began the second quarter with 74% of its theater locations open. Now, thanks to easing COVID-19 restrictions, increased vaccination rates and consumer confidence, 97% of its theaters are open, with the majority operating seven days a week with normal operating hours. The return to full operations coincides with a steady stream of new films hitting the box office, including “A Quiet Place Part II,” “Godzilla vs. Kong,” “F9: The Fast Saga,” “Cruella” and “The Conjuring: The Devil Made Me Do It.”
“Towards the latter half of the fiscal 2021 second quarter, studios released a number of exciting new films to the market, with four of the top five films released during the last five weeks of the quarter,” said Rolando Rodriguez, chairman, president and chief executive officer of Marcus Theatres.
Average concession revenues per person increased 17% during the first half of fiscal 2021 compared to the first half of fiscal 2020, which indicates pent-up demand for out-of-home entertainment activities, said Rodriguez.