For the full year of fiscal year 2025, there was only a 3% increase over fiscal year 2024. Excluding fourth quarter theater impairment charges, operating income was $22.2 million compared to $25.9 million in fiscal 2024 (excluding impairment and non-recurring charges). Full-year adjusted EBITDA decreased 3.1% to $99.3 million.
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The theater division posted fourth-quarter revenue of $123.8 million, up 2.2% year over year. Paris noted that the change in the fiscal calendar boosted the comparison: Marcos’ fiscal year ended Dec. 26 in fiscal 2024, rather than Dec. 31 in fiscal 2025, resulting in five extra days during the busy holiday period in the fourth quarter and a net one extra operating day. Management said the calendar change contributed 6.8 percentage points to admissions revenue growth and 6.4 percentage points to attendance growth compared to last year’s fiscal quarter.
Comparable theater admissions revenue increased 6.1% over last year’s fiscal fourth quarter, which management attributed to a more favorable mix of family films. In the calendar quarter, comparable admissions revenue decreased 0.7%. Comparable attendance decreased 5.7% on a fiscal-quarter basis, and decreased 12.1% on a calendar-quarter basis.
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Average admission price increased 12.7% year-over-year, which management said reflected strategic pricing optimization during peak demand periods, changes in holiday promotions, and a higher mix of 3D tickets. Using Comscore data compiled by the company for comparable fiscal weeks, management said U.S. box office receipts fell 1.5% during the company’s fiscal fourth quarter, meaning Marks outperformed by nearly 7.6 percentage points.
Privilege performance is also improved. Per capita concession food and beverage revenue increased 7.2% year-over-year, due to higher events, increased merchandise sales, and price changes. The top 10 films represented about 70% of the quarter’s box office (vs. about 75% a year ago), and management said a slightly less concentrated slate reduced total movie costs as a percentage of admissions to less than a percentage point; Film spending percentage was flat for the full year compared to fiscal 2024.
Adjusted EBITDA for theaters was $24.1 million, up just under 2% year over year.
The Hotels & Resorts division ended fiscal 2025 with what management calls another record year for segment revenue and adjusted EBITDA. Fourth-quarter revenue before expense payments was $60.4 million, up 5% year-over-year, and the calendar change had a significant impact on hotel results, according to the company.
RevPAR for owned hotels grew 3.5% in the quarter, with RevPAR growth at three of the seven owned properties. Occupancy fell 1.2 percentage points to 60.2%, while average daily rates rose 5.6% as renovated hotels attracted demand and supported higher prices.
Marks said it continues to meet industry standards. Based on STR data, comparable upscale hotels nationally posted a RevPAR increase of 0.8% in the quarter, with Marcos outperforming by 2.7 percentage points. Comparable competitive hotels in Marcus’ markets saw a 2% decline in RevPAR, and management said Marcus improved its competitive set by 5.5 percentage points. Executives attributed the good performance to a combination of strong demand for renovated hotels and a strong demand for short-term leisure at higher prices.
Group demand was broadly stable in the quarter. Group rooms represented 35% of the total room mix, compared to 36% in the prior-year quarter, which benefited from election-related group business. Hotels’ adjusted EBITDA was $7.3 million, up 3.4% year-over-year, driven primarily by higher revenue.
CEO Greg Marcus also provided an update on major property initiatives. He said renovations to the Hilton Milwaukee were completed in the fourth quarter with lobby and lounge updates, after work on 554 guest rooms, ballrooms, meeting space, and public spaces. The company did not renovate the 175-room West Wing, removed those rooms from the Hilton system at the end of December, and in mid-January reopened the West Wing as the Mark Hotel, an independent select-service hotel connected to the Baird Center via a skywalk.
Looking ahead, management said it expects low single-digit RevPAR growth in fiscal 2026, led by modest group growth and steady leisure and business travel. Group room revenue bookings for fiscal 2026 were running about 3% ahead of last year’s pace in the same period, while group 2027’s pace was “slightly behind,” which executives cautioned could vary based on the timing of bookings. The banquet and dining pace for 2026 and 2027 is said to be ahead of last year.
Marcus reported fourth-quarter operating cash flow of $48.8 million, down from $52.6 million a year earlier, which management attributed to the timing of working capital at the end of the fiscal year. Full-year operating cash flow was $84.2 million, down from just $104 million in fiscal 2024, also impacted by the timing of working capital.
Capital expenditures were $22.4 million in the fourth quarter (down from $25.4 million a year ago) and $83.2 million for fiscal 2025 (up from $79.2 million in fiscal 2024). The company repurchased about 118,000 shares for $1.8 million during the quarter. For fiscal 2025, Marks bought back just 1.1 million shares for nearly $18 million, representing about 3.6% of shares outstanding at the start of the year. Since resuming buybacks in the third quarter of fiscal 2024, total repurchases have exceeded 1.8 million shares, or approximately 5.7% of the initial share count, for approximately $28 million returned to shareholders. Management said that through fiscal years 2024 and 2025, the company will return more than $45 million through share buybacks and dividends.
Marcus ended the quarter with more than $23 million in cash and more than $230 million in liquidity. Management reported a debt-to-equity ratio of 26% and 1.5x net profit.
For fiscal year 2026, the company expects a “significant step” in capital expenditures as major hotel reinvestment projects come to an end. Marcus estimates total capex of $50 million to $55 million, including:
Management said the lower cost level should lead to a significant increase in free cash flow in fiscal 2026, which it expects to allocate between opportunistic growth investments and capital returns to shareholders. The CEO said the company remains committed to growing shares over time and opportunistically repurchasing shares when cash generation exceeds near-term reinvestment needs.
In the theater business, executives emphasized a continued focus on per capita spending and customer experience. Greg Marcus described a number of innovations being tested or rolled out, including a single-line queuing system with commercial shows (tested at 14 locations in the fourth quarter), a digital ticketing experience for the mobile web and app launched in November, and a redesigned marcustheatres.com website launched in early February. The company also began testing QR code ordering with on-set delivery at dining locations and said it plans to roll out QR ordering to all 20 movie theaters and dine-in theaters.
Management has also introduced customer retention programs including Marcus Passports, Marcus Mystery Movie, and Marcus Movie Club membership offer. The company said its loyalty program, Marcus Magical Movie Rewards, has 6.9 million members.
To deliver the film, executives said they are motivated by the 2026 slate and have listed several titles they believe have strong potential. Management also said that the 2026 slate includes a strong mix of tentpole films and more family content, which it expects to benefit Marcus’ Midwest markets.
The Marcus Corporation, together with its subsidiaries, owns and operates movie theaters, hotels and resorts in the United States. It operates a family entertainment center and multi-screen motion theaters under the Marcus brand names Big Screen Bistro, Big Screen Bistro Express, Bistro Plex, and Movie Tavern. The company also owns and operates full-service hotels and resorts, as well as manages full-service hotels, resorts, and other properties. In addition, it provides hospitality management services, including check-in, housekeeping, and maintenance for vacation property development; and manages condominium hotels under long-term management contracts.
The article “Marcus Q4 Earnings Highlights” was originally published by MarketBeat.
