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MC

MARCUS CORP (MCS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue rose 16.6% year over year to $188.3M, while diluted EPS improved to $0.03 versus $(0.05) in Q4 2023; Adjusted EBITDA climbed 41.9% to $25.9M, aided by a stronger film slate and record Hotels & Resorts performance in the year .
  • Theatres delivered 22.9% revenue growth and 61.3% Adjusted EBITDA growth in Q4, driven by blockbuster titles (Wicked, Moana 2) and value pricing, though average ticket price fell 10.6% from promotions and the prior-year Taylor Swift event pricing .
  • Hotels posted Q4 RevPAR +3.6% with 61.4% occupancy; the division reported record full-year revenue and Adjusted EBITDA as group mix rose to 41.9% in FY24 and outperformed upper-upscale peers by 1.4ppt in Q4 .
  • Capital allocation setup for 2025: CapEx guidance $70–$85M (Hotels $50–$60M; Theatres $20–$25M), dividend declared at $0.07 per share, and fiscal year transition to calendar quarters to simplify comparisons and reduce holiday timing distortions .
  • Street consensus (S&P Global) for Q4 was unavailable due to provider limits; estimate-relative analysis not shown. Expect narrative catalysts around subscription “Marcus Movie Club,” digital concession upsell, and a stronger 2025/2026 film slate .

What Went Well and What Went Wrong

What Went Well

  • Theatres outperformed internally: same-store attendance +29.1% on stronger slate and value programs, lifting segment Adjusted EBITDA +61.3% YoY in Q4; top films included Wicked and Moana 2 .
  • Hotels delivered record full-year revenue and Adjusted EBITDA; Q4 RevPAR +3.6% and outperformance of upper-upscale peers by 1.4ppt despite renovation drag; banquet & catering revenue +5.6% YoY in Q4 .
  • Management tone constructive into 2025/2026: “We exited 2024 with growing momentum… anticipation already building for Mission Impossible… Jurassic World… Avatar” (CEO) ; and subscription launch: “Encouraged by early level of customer interest and sign-ups with over 30% selecting annual membership” .

What Went Wrong

  • Consolidated operating loss of $(2.2)M in Q4 driven by $6.4M noncash impairment in Theatres and $2.4M nonrecurring costs; average ticket price down 10.6% on value initiatives and lapping Taylor Swift event pricing .
  • Q4 box office underperformed national receipts by ~7.5ppt (Comscore-based) despite attendance gains, attributed to pricing strategy differences versus major exhibitors .
  • Renovation impact: Hilton Milwaukee project reduced Hotels’ Q4 RevPAR growth by ~1.3ppt; Hotels’ Q4 Adjusted EBITDA edged down to $7.1M on timing of higher incentive comp .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarters

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$161.5 $176.0 $232.7 $188.3
Diluted EPS ($)$(0.05) $(0.64) $0.73 $0.03
Adjusted EBITDA ($USD Millions)$18.2 $22.0 $52.3 $25.9
Operating Income (Loss) ($USD Millions)$1.2 $2.2 $32.8 $(2.2)
Consensus Revenue ($USD Millions)Unavailable*Unavailable*Unavailable*Unavailable*
Consensus EPS ($)Unavailable*Unavailable*Unavailable*Unavailable*

*S&P Global consensus estimates unavailable due to provider limit; values could not be retrieved.

Segment Breakdown

Segment MetricQ4 2023Q2 2024Q3 2024Q4 2024
Theatres Revenue ($USD Millions)$98.6 $101.5 $143.8 $121.2
Theatres Adjusted EBITDA ($USD Millions)$14.7 $15.1 $33.2 $23.7
Hotels/Resorts Revenue ($USD Millions, incl. cost reimbursements)$62.9 $74.5 $88.7 $67.1
Hotels/Resorts Adjusted EBITDA ($USD Millions)$7.4 $11.4 $23.1 $7.1

KPIs

KPIQ3 2024Q4 2024
Theatres same-store attendance growth (%)+7.1% +29.1%
Theatres average ticket price change (%)+2.6% −10.6%
Theatres concession per person change (%)+7.9% −3.9%
Hotels comparable RevPAR growth (%)+9.8% +3.6%
Hotels occupancy (owned, avg.) (%)N/A61.4%
Hotels group rooms mix (%)36% 36%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total CapEx ($USD Millions)FY 2025N/A$70–$85 New
CapEx – Hotels ($USD Millions)FY 2025N/A$50–$60 New
CapEx – Theatres ($USD Millions)FY 2025N/A$20–$25 New
Hotels RevPARFY 2025N/ALow-to-mid single-digit growth (qualitative) New
Dividend per share ($)Next payment$0.07 (Nov 2024) $0.07 declared; payable Mar 17, 2025 Maintained
Fiscal calendar changeFY 2025N/ATransition to calendar quarters; +4 days in Q1, +1 day in Q3/Q4 vs FY24 New

Earnings Call Themes & Trends

TopicQ2 2024 (Jun)Q3 2024 (Sep)Q4 2024 (Dec)Trend
Film slate recoveryJune momentum from Inside Out 2 / Deadpool & Wolverine; promotions launched Record quarter; slate strength with Inside Out 2, Deadpool & Wolverine; outlook for Gladiator II, Wicked, Moana 2 Holiday slate strong; families driving attendance; 2025/2026 slates cited (Mission Impossible, Jurassic World, Avatar) Improving slate → stronger attendance
Pricing strategy & valueEveryday Matinee ($7) and Value Tuesday enhanced Value Tuesday + complimentary popcorn; ticket price up 2.6% on PLF mix Average ticket −10.6% from promotions and lapping Taylor Swift; focus on long-term attendance Lean into value to build habit-forming attendance
Subscription (Movie Club)N/AN/ALaunched Nov; >30% annual sign-ups; view as attendance and cash flow driver New growth lever
Concessions & digitalN/AN/ADigital upsell expected to raise basket size; frictionless mobile ordering focus Enhancing per-cap via digital
Hotels group & occupancyGroup pace ahead for remainder of 2024/2025 Record quarter; RNC boost; outperformance Record year; Q4 RevPAR +3.6%; strong 2025/2026 group pace Sustained group-led growth
RenovationsPfister nearing completion; Grand Geneva ballrooms done Recognition and renovations highlighted Hilton Milwaukee ~$40M renovation; short course project at Grand Geneva Elevated asset quality with temporary disruption
Capital structureRepurchasing converts; senior notes issued Completed retirement of converts; extended maturities Converts fully retired; ~1.3x net leverage; >$260M liquidity Simplified, flexible balance sheet

Management Commentary

  • CEO on momentum and slate: “We exited 2024 with growing momentum and continued confidence… anticipation already building for Mission Impossible… Jurassic World… Avatar” .
  • Theatres president on value strategy: “We believe any short-term impact on pricing will translate into a longer-term propensity for regular, repeat moviegoing” .
  • Hotels president on record year: “Improvements in group bookings, higher occupancy and ADRs… helped deliver our record results in 2024” .
  • CFO on estimate items: “~$6M benefit from release of valuation allowances… full-year net loss negatively impacted by $16.7M debt conversion expense” .

Q&A Highlights

  • Pricing and attendance: Management reiterated attendance is the north star; value programs and subscription are balanced against pricing to drive long-term moviegoing habits .
  • Screen count vs cash flow: Emphasis on cash flow over rapid footprint expansion; looking for disciplined growth amid a quiet transaction market .
  • Concession upsell via digital: Expect larger baskets from suggestive selling, last-chance offers, and mobile wallet; reducing friction to capture demand when lines deter purchases .
  • Movie Club adoption and pricing: Early adoption encouraging; pricing seen as competitive; Tuesday value already covers part of the “value” segment, so impact will be monitored .
  • Hotels leisure vs business: Leisure normalization offset by improving group/business travel; upper-upscale positioning and ski conditions supported weekend demand .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 were unavailable due to provider limits; therefore, comparisons to revenue/EPS consensus are not shown. Future updates should incorporate SPGI consensus to assess beats/misses (disclaimer: consensus values would be sourced from S&P Global if available).
  • Longer-term analyst context mentioned on the call: an investor noted Street models point to 2019 revenue levels by 2026; management emphasized theatre box office volume and leverage as key determinants for net income trajectory .

Key Takeaways for Investors

  • Theatres: Attendance rebound and value-led strategy are driving EBITDA, but pricing choices temporarily dampened box office vs industry; subscription (Movie Club) and digital concessions are incremental levers into 2025 .
  • Hotels: Group-led strength and upper-upscale positioning support low-to-mid single-digit RevPAR growth in 2025; renovation headwinds should fade as Hilton Milwaukee completes during 1H25 .
  • Balance sheet: Converts retired, extended maturities, >$260M total liquidity, ~1.3x net leverage—provides flexibility for CapEx, growth, and shareholder returns .
  • Capital allocation: 2025 CapEx $70–$85M skewed to Hotels; management targets dividend growth over time and opportunistic buybacks contingent on excess cash generation .
  • Operational cadence: Fiscal calendar change reduces holiday-week distortion, improving comparability and potentially smoothing quarter-end performance optics .
  • Trading setup: Near-term narrative catalysts include 2025/2026 slate visibility, subscription traction, and digital upsell; watch for attendance trends, per-cap concessions, and Hotels group pace to sustain momentum .
  • Risks: Film slate variability and pricing strategy vs peers can swing box office share; renovation timing can temporarily compress hotel metrics; noncash items (impairment, tax valuation) impacted reported GAAP results in Q4 .