Marcus Theatres saw revenue and profit dip last quarter but is the latest exhibitor to report a soft April and May leading into a notable positive shift in June as the industry shakes off the impact of the Hollywood strikes last year.
CEO Greg Marcus noted that there weren’t fewer films in the first half, just not the right mix. “It has to be what I call a normal slate. If you release 100 films and not one of them is tentpole, that is not a normal slate,” he said on a post-earnings call with analysts. There were plenty of films in the earlier part of 2024, he said “and I’m glad they were putting movies out there. But not tentpoles.”
The market still needs big and small films. “You’ve got to take enough swings and you got to get people back in the habit,” he said. “Twenty years from now, the number of kids who will say to someone, ‘I remember my parents took me to my first movie. They took me to the living room and we turned on the TV and we watched Inside Out 2, will be zero.” The movie theater experience is another story.
Strong numbers in June and July from Inside Out 2 and Deadpool & Wolverine along with Despicable Me 4 and Twisters, “continue to affirm that consumers crave seeing great movies on the big screen,” the company said.
As the exhibition biz consolidates, execs said on the call that Marcus has acquired a few theaters and is always looking for more, but not considering acquiring another circuit.
“Buying a circuit of theaters can be difficult because many locations in the portfolio are not cash flow positive,” said CFO Chad Paris. Buyers need to evaluate what they are thinking about paying and what they are getting and have to look location by location. It’s harder to do, “but that is where the financial returns are. That could change but the industry needs to stabilize first so players can “understand what the rent needs to look like.”
The chain’s Milwaukee-based parent company business is split between hotels, which had a better quarter, and movie theaters. Its shares popped 5% today after the numbers.
Marcus Theatres’ revenue fell to $101 million in the second quarter from $137 million a year ago. Operating income of $2.8 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $15.1 also dipped on lower attendance.
Average ticket price decreased 3.1% with an increase in promotions and a higher percentage of attendance on Value Tuesday, where it also brought back a free complimentary size popcorn for members of its Magical Movie Rewards loyalty program.
The chain launched its Everyday Matinee program during the second quarter, offering a $7 ticket for kids and seniors for all shows starting before 4 pm.
Theatres president Mark Gramz said Inside Out 2, Bad Boys: Ride or Die and IF performed particularly well in the chain’s primarily Midwestern markets in Q2. Heading into the second half, the momentum has continued with Despicable Me 4 and Twisters, and record setting blockbuster Deadpool & Wolverine. Up next – Beetlejuice Beetlejuice and Joker: Folie a Deux, then Smile 2, Venom: The Last Dance, Gladiator II, Wicked Part One, Moana 2, Mufasa: The Lion King , and Sonic the Hedgehog 3.