MARCUS CORP Q2 FY2024 earnings call

• Hotels: Continued strong group business, occupancy near 73%, RevPAR growth, and benefit from revenue management. Banquet and catering revenues up 3.8%. RNC in Milwaukee generated over $3 million in incremental revenue. Guest room and meeting space renovations at hotels. - Theaters: Improved performance in June with better film mix and promotions. Rolled out $7 everyday matinee for seniors and children, reintroduced free popcorn on Tuesdays. Anticipate stronger second half with upcoming films like Beetlejuice Beetlejuice, Joker, etc. Looking ahead to 2025 with strong franchise slates. Interest in growing theater business through acquisitions in attractive locations.

Hotels & Resorts division: Revenues were $74.5 million for the second quarter of fiscal 2024, an increase of 6.3% compared to the prior year. Total revenue before cost reimbursements increased over $3.4 million or 5.6% over the second quarter of last year. RevPAR for comparable owned hotels grew 6.5%, with group rooms increasing to 44.6% of the total room mix. Banquet and catering revenues were up 3.8%. Adjusted EBITDA grew to $11.4 million. Theaters division: Total revenue of $101.5 million decreased 25.9% compared to the prior year second quarter. Comparable theater admission revenue decreased 28.8%, with attendance down 26.3%. Underperformed the nation in April and May but significantly outperformed in June. Adjusted EBITDA was $15.1 million, down from $31.3 million in the prior year quarter.

• Capital expenditures for fiscal 2024 expected to be $60-75 million, with projects subject to timing changes. - Refinancing transactions simplified capital structure, extending weighted average debt maturity. - Outlook for stronger second half in theaters with better film slate and continued growth in hotel group business and events.

Q: About hotel sector, displacement impact from RNC and Saint Kate's potential?

A: RNC moved some business later, but overall net positive. Saint Kate concept growing, but hard to judge with one-timer event.

Q: Cinema side, film flow vs quality?

A: Number of films matters, but need tent poles. Alternative content important for high-margin customers, loyalty programs key for marketing.

Q: Alternative content aftermath, lasting impact?

A: Alternative content will continue, loyalty programs help market to audiences, like Bollywood and concert films growing.

Q: Hotel growth confidence, leisure softness?

A: Leisure softness normalizing, group business growth offsetting, strong group bookings for remainder of fiscal 2024 and 2025.

Q: Theater acquisitions, market opportunity?

A: Looking for deals, similar to original company building by partnering with landlords, out talking to people for individual deals.

Q: Theater promotions, consumer trading down?

A: Changes like free popcorn on Tuesdays tested, not indicative of weaker consumer, but value pricing important. Clustering in regions has marketing benefits, but single theaters can work with effective marketing.