Milwaukee-based Marcus Corp. closed fiscal 2019 with record revenues thanks to its Movie Tavern acquisition, but saw decreases in both operating income and net earnings.
Total revenues for fiscal 2019 were a record $820.9 million, up 16.1% from $707.1 million in fiscal 2018. Fourth quarter revenues saw an even greater year-over-year increase: 18.2% from $175 million in 2018 to a record $206.9 million in 2019.
However, net earnings attributable to the company were down 21.3% for the full year and 10.5% for Q4, compared to 2018. Operating income for both the full year and Q4 also dropped 18% and 8.7%, respectively.
Marcus said its movie theater and hotel divisions also achieved record revenues, with Marcus Theatres’ revenues increasing 26.1% in the fourth quarter and 24.7% during the full year.
The company attributed record revenues across the board to its 22 Movie Tavern locations, which Marcus Theatres purchased last year from VSS-Southern Theatres LLC for $126 million. The acquisition increased its theater count by 23 percent, from 68 locations in eight states to 90 locations in 17 states.
“Our new Movie Tavern theatres contributed to our record revenues, but overall results for Marcus Theatres were primarily impacted by a weaker film slate than in the prior year,” Gregory Marcus, president and chief executive officer of The Marcus Corp. “The weaker film slate was also reflected in the 2019 national box office, which was down from 2018, but was still the second highest on record,” he said.
Low attendance contributed to decreases in operating income for both the fourth quarter and full year, but that was partially offset by higher concession revenues per person and a higher average ticket price.
The five top-performing films for Marcus Theatres in the fourth quarter were: Frozen 2; Star Wars: The Rise of Skywalker; Joker; Jumanji: The Next Level and Knives Out. For the full year, the top performing movies were Avengers: Endgame, The Lion King, Frozen 2, Toy Story 4 and Captain Marvel.
This year is expected to be more promising for Marcus’ movie theater division, with a greater quantity of films and less dependence on blockbusters, said Rolando Rodriguez, chairman, president and CEO of Marcus Theatres.
“The first quarter of 2020 is off to a solid start, with higher admission revenues at comparable theatres compared to the same time last year,” he said. “This is due to a strong week between December 27 and New Year’s Day and an improved January and February film slate, with strong holdover movies from 2019 and new movies including 1917, Bad Boys For Life and Sonic the Hedgehog contributing to the early first quarter results.”
For Marcus Hotels & Resorts, revenue per available room increased 1.3% in the fourth quarter and 1.0% for the full year. That excludes Saint Kate, the company’s new arts hotel that opened in June at the former InterContinental hotel in downtown Milwaukee.
That project, along with extensive renovations at the Hilton Madison Monona Terrace in Madison contributed to operating loss in the fourth quarter of 2018 and the first part of 2019.
Excluding Saint Kate, fiscal 2019 operating income would have improved by 7.6%, the company said. But Marcus is pleased with the hotel’s performance so far.
“The initial guest and community response to Saint Kate has been fantastic as the hotel continues to ramp up,” he said. “The hotel is achieving a higher average daily room rate than the hotel it replaced and its food and beverage revenues are exceeding the former hotel as well.”
