Marcus (NYSE:MCS) reported fiscal 2025 fourth-quarter results that management described as “solid execution,” with both the Theatres and Hotels & Resorts divisions posting year-over-year revenue and earnings growth and outperforming their respective industries. Executives also outlined expectations for lower capital spending in fiscal 2026, an increase in free cash flow, and continued efforts to return capital to shareholders while staying alert for selective growth opportunities.
Consolidated results and notable items
For the fiscal 2025 fourth quarter, Marcus generated consolidated revenue of $193.5 million, up 2.8% from the prior-year quarter, with growth in both operating segments. Operating income was $1.7 million, but management said results were negatively impacted by $5.2 million of non-cash impairment charges in the Theatres division. Excluding those charges, operating income was $6.9 million, compared with $6.6 million in the prior-year quarter (excluding impairment charges and non-recurring expenses).
For full-year fiscal 2025, consolidated revenue increased just over 3% versus fiscal 2024. Operating income was $17.1 million; excluding the fourth-quarter theater impairment charges, operating income was $22.2 million compared with $25.9 million in fiscal 2024 (excluding impairments and non-recurring expenses). Full-year Adjusted EBITDA decreased 3.1% to $99.3 million.
Theatres: pricing and per-cap growth help drive outperformance
The Theatres division posted fourth-quarter revenue of $123.8 million, up 2.2% year over year. Paris noted that a fiscal calendar shift boosted comparisons: Marcus’ fiscal year ended December 31 in fiscal 2025 versus December 26 in fiscal 2024, resulting in five additional days in the fourth quarter during the busy holiday period and a net one additional operating day. Management said the calendar shift contributed 6.8 percentage points to admissions revenue growth and 6.4 percentage points to attendance growth versus the prior-year fiscal quarter.
Comparable theatre admission revenue increased 6.1% versus the prior-year fiscal fourth quarter, which management attributed to a more favorable mix of family films. On a calendar quarter basis, comparable admission revenue decreased 0.7%. Comparable attendance fell 5.7% on the fiscal-quarter comparison, and declined 12.1% on a calendar quarter basis.
Average admission price increased 12.7% year over year, which management said reflected strategic price optimization during peak-demand periods, changes to 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 decreased 1.5% during the company’s fiscal fourth quarter, implying Marcus outperformed by roughly 7.6 percentage points.
Concession performance improved as well. Per-capita concession food and beverage revenue increased 7.2% year over year, driven by higher incidence, increased merchandise sales, and pricing changes. The top 10 films represented about 70% of the quarter’s box office (versus about 75% a year earlier), and management said the slightly less concentrated slate reduced overall film cost as a percentage of admissions revenue by less than one percentage point; film cost percentage was flat for the full year versus fiscal 2024.
Theatres Adjusted EBITDA was $24.1 million, up just under 2% year over year.
Hotels: renovated assets drive rate gains and RevPAR outperformance
The Hotels & Resorts division ended fiscal 2025 with what management called another record year for division revenue and Adjusted EBITDA. Fourth-quarter revenues before cost reimbursements were $60.4 million, up 5% year over year, and the calendar shift had an insignificant impact on hotel results, according to the company.
RevPAR for owned hotels rose 3.5% in the quarter, with RevPAR growth at three of seven owned properties. Occupancy declined 1.2 percentage points to 60.2%, while average daily rate increased 5.6% as renovated hotels attracted demand and supported higher pricing.
Marcus said it continued to outperform industry benchmarks. Based on STR data, comparable upper upscale hotels nationally posted a 0.8% RevPAR increase in the quarter, implying Marcus outperformed by 2.7 percentage points. Comparable competitive hotels in Marcus’ markets saw a 2% RevPAR decrease, and management said Marcus outperformed its competitive set by 5.5 percentage points. Executives attributed outperformance to strong demand for renovated hotels and a heavier mix of transient leisure demand at higher rates.
Group demand was described as generally steady in the quarter. Group rooms represented 35% of total room mix, compared with 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.
Chief Executive Officer Greg Marcus also provided an update on major property initiatives. He said the Hilton Milwaukee renovation was completed in the fourth quarter with updates to the lobby and lounge, following work on 554 guest rooms, ballrooms, meeting space, and public common spaces. The company did not renovate a 175-room west wing, removed those rooms from the Hilton system at the end of December, and reopened the west wing in mid-January as the Mark Hotel, an independent select-service hotel connected to the Baird Center via 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 said to be running about 3% ahead of last year’s pace at the same time, while 2027 group pace was “slightly behind,” which executives cautioned can vary based on booking timing. Banquet and catering pace for 2026 and 2027 was said to be ahead of last year.
Capital allocation: lower capex expected; buybacks and dividends continue
Marcus reported fourth-quarter operating cash flow of $48.8 million, down from $52.6 million a year earlier, which management attributed to working capital timing around fiscal year-end. Full-year operating cash flow was $84.2 million, down from just under $104 million in fiscal 2024, also impacted by working capital timing.
Capital expenditures totaled $22.4 million in the fourth quarter (down from $25.4 million a year earlier) 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 in the quarter. For fiscal 2025, Marcus repurchased just over 1.1 million shares for approximately $18 million, representing about 3.6% of shares outstanding at the beginning of the year. Since resuming buybacks in the third quarter of fiscal 2024, cumulative repurchases have exceeded 1.8 million shares, or about 5.7% of the starting share count, for nearly $28 million returned to shareholders. Management said that over fiscal 2024 and 2025 combined, the company returned more than $45 million through repurchases and dividends.
Marcus ended the quarter with more than $23 million in cash and over $230 million in total liquidity. Management reported a debt-to-capitalization ratio of 26% and 1.5x net leverage.
For fiscal 2026, the company expects a “meaningful step down” in capital expenditures as major hotel reinvestment projects wind down. Marcus projected total capex of $50 million to $55 million, including:
- $25 million to $30 million for hotels
- $20 million to $25 million for theatres
Management said the lower spending level should drive a significant increase in free cash flow in fiscal 2026, which it expects to allocate between opportunistic growth investments and returning capital to shareholders. Executives said the company remains committed to growing the dividend over time and repurchasing shares opportunistically when cash generation exceeds near-term reinvestment needs.
Strategic initiatives: technology, loyalty programs, and a stronger film slate
In the Theatres business, executives emphasized a continued focus on per-capita spending and customer experience. Greg Marcus described several initiatives being tested or rolled out, including a single-line queuing system with merchandise displays (tested at 14 locations in the fourth quarter), a redesigned digital ticketing experience for mobile web and the app launched in November, and a redesigned marcustheatres.com website launched in early February. The company also began testing QR code ordering with seat delivery at select dine-in locations and said it plans to roll out QR ordering to all 20 Movie Tavern and dine-in theatres.
Management also highlighted customer retention programs including Marcus Passports, Marcus Mystery Movie, and the Marcus Movie Club subscription offering. The company said its loyalty program, Marcus Magical Movie Rewards, has 6.9 million members.
For film supply, executives said they are encouraged by the 2026 slate and listed several titles they believe have strong potential. Management also said the 2026 slate includes a stronger mix of tent-pole films and more family content, which it expects to benefit Marcus’ Midwestern markets.
About Marcus (NYSE:MCS)
The Marcus Corporation, together with its subsidiaries, owns and operates movie theatres, and hotels and resorts in the United States. It operates a family entertainment center and multiscreen motion picture theatres under the Big Screen Bistro, Big Screen Bistro Express, BistroPlex, and Movie Tavern by Marcus brand names. 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 a vacation ownership development; and manages condominium hotels under long-term management contracts.
