MARCUS CORP Q1 FY2025 earnings call

Theater

• First quarter box office didn't meet expectations, but April improved; summer looks strong. Focus on attendance and long-term pricing strategies. Completed ScreenX auditorium conversions, expanding concession stands at Movie Tavern. Comparable theater attendance growth better than national peers.

Hotels

• First quarter exceeded expectations. Hilton Milwaukee renovation ongoing (65% rooms back in service by June 30). Group business stable, bookings solid. Banquet and catering growing. RevPAR growth despite renovation impact.

Theater Division

• Fiscal 2025 Q1 total revenue: $87.4 million, up 7.5% y-o-y. 4 additional operating days contributed $7.1 million (8.7% of revenue). Comparable theater admission revenue +1.3%, comparable attendance +6.9% y-o-y. On calendar quarter, admission revenue -14%, attendance -8%. Box office trailed industry by ~1.8 percentage points. Average admission price -5.1% due to ticket mix and promotions. Concession F&B per person +0.8% due to inflation. Film cost +2.4% of admission revenue, labor costs higher. Adjusted EBITDA: $3.7 million vs $6.2 million y-o-y.

Hotels and Resorts Division

• Revenues: $61.3 million, up 7.2% y-o-y. 4 additional operating days contributed $2.1 million. RevPAR +1.1% (ADR +8% offsetting occupancy -3.4%). Hilton Milwaukee renovation impacted occupancy. Banquet and catering F&B +10%, other revenues +11.4%. Adjusted EBITDA +$1 million y-o-y.

Theater

• Positive outlook for summer, focus on attendance and ancillary revenue. Investment in ScreenX and concession stands to increase per capita revenues.

Hotels

• Confident in business model, renovation progress, group bookings strong but monitor economic uncertainty affecting demand.

• Theater: Film slate variability, pricing pressure in slowing economy.
• Hotels: Economic uncertainty affecting demand, Hilton Milwaukee renovation impact on occupancy and RevPAR.

Q: Concessions per patron up 0.8%, what's the impact of incidence and basket size?

A: Almost entirely pricing, little change in incidence or basket size compared to last year.

Q: Ability to take price if cost pressures arise?

A: Done price in last 3 years, will be thoughtful in softening economy and approach future pricing changes accordingly.

Q: Hilton Milwaukee renovation impact on pricing?

A: Renovation was needed, should benefit from convention center expansion and be a first choice hotel.

Q: Impact of Marcus Movie Club subscription?

A: Early days, minimal impact so far but pleased with uptake.

Q: Hotel group pace?

A: Strong in key properties, not across all markets; driven by events in markets and renovated properties.

Q: Ticket pricing and Marcus Movie Club?

A: Initial results positive, minimal impact so far but moving in desired direction.

Q: Labor costs in theaters?

A: First quarter was return to normal operating hours, some room for labor efficiency improvement, not expected to continue as is.