8-K: Marcus Corporation Reports Improved Fourth Quarter and Full Year Fiscal 2024 Results Driven by Stronger Film Slate and Record Performance at Hotels & Resorts

Marcus Corporation announces its fourth quarter and full year fiscal 2024 results, highlighting improved performance in the theatre division due to a stronger film slate and a record year for the hotels and resorts division.

Summary

• Marcus Corporation reported a 16.6% increase in total revenues for the fourth quarter of fiscal 2024, reaching $188.3 million compared to $161.5 million in the prior year quarter.
• The company's operating loss for the fourth quarter was $2.2 million, impacted by $6.4 million in noncash impairment charges.
• Net earnings for the fourth quarter were $1.0 million, or $0.03 per diluted common share, compared to a net loss of $1.4 million, or $0.05 per diluted common share, for the same period in fiscal 2023.
• Adjusted EBITDA for the fourth quarter increased by 41.9% to $25.9 million from $18.2 million in the prior year quarter.
• For the full year fiscal 2024, total revenues increased by 0.8% to $735.6 million from $729.6 million in fiscal 2023.
• Operating income for fiscal 2024 was $16.2 million, a 52.3% decrease from $33.9 million in fiscal 2023, impacted by $6.8 million in noncash impairment charges.
• The net loss for fiscal 2024 was $7.8 million, compared to net earnings of $14.8 million for fiscal 2023, but excluding the impacts of convertible senior notes repurchases, net earnings was $9.0 million.
• Adjusted EBITDA for the full year fiscal 2024 decreased by 5.8% to $102.4 million from $108.7 million in fiscal 2023.
• Marcus Theatres reported a 22.9% increase in total revenues for the fourth quarter of fiscal 2024, reaching $121.2 million.
• Marcus Hotels & Resorts reported record total revenues and Adjusted EBITDA for the full year fiscal 2024, with total revenues before cost reimbursements of $248.3 million, a 6.4% increase compared to fiscal 2023.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the improved fourth-quarter results, record performance in the hotels division, and optimistic outlook for 2025. However, the full-year net loss and decrease in operating income temper the overall positive sentiment.

Positives

• The stronger film slate in the second half of fiscal 2024 significantly benefited Marcus Theatres.
• Marcus Hotels & Resorts achieved record total revenues and Adjusted EBITDA for the full year fiscal 2024.
• Group booking trends for Marcus Hotels & Resorts are above pre-pandemic levels.
• Early membership sales of Marcus Movie Club have been encouraging, with over 30% of customers choosing annual memberships.
• Comparable RevPAR grew at five out of seven company-owned hotels, increasing 6.2% in fiscal 2024 compared to fiscal 2023.

Negatives

• Operating loss was $2.2 million for the fourth quarter of fiscal 2024, impacted by noncash impairment charges of $6.4 million.
• Operating income for fiscal 2024 decreased by 52.3% to $16.2 million, impacted by $6.8 million in noncash impairment charges.
• Net loss was $7.8 million for fiscal 2024, compared to net earnings of $14.8 million for fiscal 2023.
• Adjusted EBITDA for the full year fiscal 2024 decreased by 5.8% to $102.4 million.
• Average ticket price at Marcus Theatres decreased 10.6% in the fourth quarter of fiscal 2024.

Risks

• The availability and audience appeal of motion pictures can impact the theatre division.
• Adverse economic conditions in the company's markets can affect performance.
• Competitive conditions in the company's markets can impact occupancy and room rates.
• The company's ability to achieve expected benefits from strategic initiatives and acquisitions is uncertain.
• Disruptions in business and reputational and economic risks associated with civil securities claims brought by shareholders.

Future Outlook

The company anticipates a larger quantity of high-quality films will thrill moviegoers throughout 2025 and expects continued growth and impact in the hotel division, with group booking trends above pre-pandemic levels and improvements in weekday occupancy growth.

Management Comments

• Our fourth quarter and full year results were a testament to the continued operational excellence by our associates at Marcus Theatres and Marcus Hotels & Resorts, said Gregory S. Marcus, chief executive officer of Marcus Corporation.
• Our theatre division benefited from a much-improved slate of higher-quality films in the second half of fiscal 2024, while our hotel division continued their consistently strong performance resulting in a record year, said Gregory S. Marcus, chief executive officer of Marcus Corporation.
• As we head deeper into 2025, we anticipate a larger quantity of high-quality films will thrill moviegoers throughout the year, with anticipation already building for Mission Impossible: The Final Reckoning, Jurassic World: Rebirth, Superman: Legacy, F1, Wicked 2 and Avatar: Fire and Ash, among other exciting films, said Mark A. Gramz, president of Marcus Theatres.
• Our record results were driven by a combination of factors, most notably improvements in group bookings, higher occupancy and average daily rates, improved revenue management and rate optimization strategies across our portfolio, as well as the positive impact of the Republican National Convention that was held in Milwaukee, said Michael R. Evans, president of Marcus Hotels & Resorts.

Industry Context

The announcement reflects the ongoing recovery in the entertainment and hospitality industries, with movie theaters benefiting from a stronger film slate and hotels experiencing increased demand and improved booking trends. The performance of Marcus Hotels & Resorts, outperforming the industry in RevPAR growth, indicates a competitive advantage in the lodging sector.

Comparison to Industry Standards

• Marcus Hotels & Resorts outperformed the industry by 1.4 percentage points in RevPAR growth during the fourth quarter of fiscal 2024.
• Marcus Hotels & Resorts outperformed the industry by 4.1 percentage points in RevPAR growth during the full year fiscal 2024.
• Comparable companies in the theatre industry include AMC Entertainment and Cinemark, which are also experiencing recovery driven by strong film releases.
• Comparable companies in the hotel industry include Marriott International and Hilton Worldwide, against which Marcus Hotels & Resorts' RevPAR and occupancy rates can be benchmarked.

Stakeholder Impact

• Shareholders may react positively to the improved fourth-quarter results and the record performance of the hotels division.
• Employees at Marcus Theatres and Marcus Hotels & Resorts are recognized for their operational excellence.
• Customers of Marcus Theatres will benefit from a stronger film slate and the Marcus Movie Club.
• Customers of Marcus Hotels & Resorts will benefit from the ongoing renovations and commitment to guest experience.

Next Steps

• Marcus Corporation management will hold a conference call on February 27, 2025, to discuss the financial results.
• The company will continue to evaluate and adjust pricing strategies to drive long-term engagement in moviegoing.
• Marcus Hotels & Resorts will continue its commitment to operational excellence and delivering an exceptional guest experience.
• The guest room renovation at the Hilton Milwaukee is expected to be substantially complete in the first half of 2025, with ballrooms and meeting space renovations substantially complete by late summer 2025.

Key Dates