Milwaukee-based The Marcus Corp. today reported a successful final transition period to end 2015, driven by the popularity of “Star Wars: The Force Awakens” at the end of 2015.
Its leaders also discussed the increasingly competitive Milwaukee hotel market.
The theater and lodging company has been in the process of changing its fiscal year end from the last Thursday in May to the last Thursday in December. These results are for the final transition period, and include both the last five weeks and the full 31-week transition period ended Dec. 31.
Net income was $3.9 million, or 14 cents per share, in the five-week period ending the year, up from a loss of $967,000, or 3 cents lost per share, in the four-week period ending 2014.
Operating income was $8 million in the 2015 period, up from a loss of $285,000 in the comparable period in 2014.
Revenue totaled $59.4 million in the five weeks ending 2015, up 81 percent from $32.8 million in the final four weeks of 2014.
While Marcus has never reported a five-week period ending Dec. 31, the performance in the quarter could otherwise be considered a record, said Greg Marcus, president and chief executive officer of The Marcus Corp. The company worked to upgrade 17 of its theaters in preparation for the major box office smash “Star Wars: The Force Awakens,” which drove much of the company’s success at the end of the year.
“I think it was pretty obvious that having Star Wars turn out to be the highest grossing movie of all time was not a bad way to end our final transition period,” Marcus said on a call with analysts this morning.
For the 31 weeks ending Dec. 31, Marcus reported $23.4 million, or 84 cents per share, up from $16.7 million, or 61 cents per share, in the 30 weeks ending Dec. 31, 2014.
Operating income was $44.4 million in the 31-week period ending 2015, up from $34 million in the comparable period in 2014. The company attributed the increase to strong cost controls.
Revenue totaled $324.3 million in the 31-week period in 2015, up from $280.6 million in the same period a year ago.
The company pointed to a strong movie lineup, as well as its expanded food and beverage options and upgraded theaters with DreamLounger recliner seating for its strong 2015 performance.
On the hospitality side, Marcus is in the process of renovating Milwaukee’s famed SafeHouse Restaurant and Bar, and is also investing in other hotel properties. The company indicated it may sell a couple of its hotels in 2016, and said it needs to “make some decisions” about the future and positioning of the InterContinental hotel in downtown Milwaukee.
The Milwaukee hotel market is becoming more competitive as new hotels open across the area, Marcus said.
“The market is being impacted by the supply (increase), it’s clear, but there are a lot of good things that are happening in Milwaukee that are helping to absorb some of it,” he said. “The important thing for us is that we make sure our hotels are well-positioned to be competitive.”
Marcus expects the surprisingly robust performance of the movie “Deadpool” will drive strong first quarter results going forward, he said.
“The transition period was very strong for Marcus Theatres, as the division once again outperformed the industry during the reported periods,” Marcus said. “The national box office was up 34.5 percent for the last five weeks of the transition period compared to the same five weeks in calendar 2014 according to Rentrak, while our box office, after adjusting last year’s numbers for the additional week of operations, was up 37.9 percent. For the 31-week transition period compared to the same 31 weeks in calendar 2014, the national box office was up 10 percent, while our box office increased 13.7 percent.”
