Marcus (NYSE:MCS) reported its strongest second quarter since 2019, with record post-pandemic quarterly revenue and adjusted EBITDA as both its theater and hotel businesses outperformed their respective industries.
Consolidated revenue rose 12.5% from the prior-year period to $232 million, while operating income more than doubled to $27 million from $13 million. Adjusted EBITDA increased 43% to $46.2 million, and net earnings climbed 116% to $15.8 million, or $0.51 per diluted share.
Theater Revenue Outpaces Domestic Box Office
The company’s Theater Division generated $150.6 million in revenue, up 14.4% from the second quarter of 2025. Comparable theater admission revenue increased 16.6%, supported by a 10.9% increase in comparable attendance and a 5.2% rise in average admission price.
Marcus said U.S. box-office receipts increased 11.5% during the quarter, based on data from Comscore compiled by the company. That implied Marcus’ admission-revenue growth exceeded the domestic industry by about five percentage points.
Paris attributed the outperformance primarily to strategic pricing actions and a film slate that was particularly favorable for the company’s predominantly Midwestern markets. Family films were a notable contributor, contrasting with the prior-year quarter, which management said had fewer family-oriented releases.
Average food and beverage revenue per customer at comparable theaters rose 2.4%, driven by higher merchandise sales, pricing and an increase in the incidence rate. Theater adjusted EBITDA increased nearly 37% to $36.3 million.
Chairman, President and Chief Executive Officer Greg Marcus said the theatrical business benefited from a broad range of successful releases, including family, franchise, horror and original films. He highlighted the contribution of original titles Obsession and Backrooms, which he said attracted Gen Z and young adult audiences.
During the question-and-answer session, Greg Marcus said younger moviegoers had been returning to theaters for roughly the past year and that the trend was not limited to the two breakout films. He said the company seeks to increase repeat attendance through programs including Value Tuesday, Everyday Matinee, Marcus Mystery Movie and Marcus Movie Club.
Paris said Marcus’ share on Obsession was in line with its typical market share, while its share on Backrooms was meaningfully above normal. He added that the company generally expects roughly 50% of incremental Theater Division revenue to flow through to EBITDA over time, though quarterly results can vary based on attendance levels and the timing of film releases.
Management also pointed to the company’s premium large-format screen footprint as an advantage. Marcus has a premium large-format screen at 84% of its theater locations, Greg Marcus said, and 75% of those locations have multiple such screens. The largely proprietary UltraScreen and SuperScreen format allows the circuit flexibility in selecting and scheduling films, management said.
Hotels Set Second-Quarter Records
The Hotels & Resorts Division reported $70.8 million in revenue before cost reimbursements, an increase of 9.6% from a year earlier. Comparable owned-hotel revenue per available room, or RevPAR, increased 13.9%, aided by a 5.9-percentage-point gain in occupancy and a 4.7% increase in average daily rate.
Average occupancy at Marcus-owned hotels reached 73.2% during the quarter. Paris said the company’s RevPAR comparison benefited by an estimated 4.4 percentage points from the prior-year impact of guest rooms being out of service during the Hilton Milwaukee renovation.
Comparable competitive hotels in Marcus’ markets posted RevPAR growth of 7.8%, meaning Marcus outperformed its competitive set by 6.1 percentage points. After accounting for the renovation effect, management said Marcus still outperformed its competitive set by about 1.1 percentage points. Comparable upper-upscale hotels nationally recorded RevPAR growth of 5.7%.
Banquet and catering food-and-beverage revenue increased 5.7%, while hotel adjusted EBITDA rose $3.5 million, or just over 31%, supported by revenue growth and operating efficiencies associated with higher occupancy.
Greg Marcus said RevPAR increased at six of the company’s seven comparable hotels, with both occupancy and average daily rates increasing at five properties. He cited continued strength in group business and resilient demand from higher-income leisure travelers.
Three newly renovated properties — The Pfister, Grand Geneva Resort & Spa and Hilton Milwaukee — achieved a nearly 9% average increase in average daily rate compared with the prior-year quarter, according to management.
Group room revenue bookings for 2026 were running about 3% ahead of the pace at the same point last year, while 2027 group pace was approximately 9% ahead. Management cautioned that booking timing can vary significantly for business booked further in advance. It also said about 80% of the remaining 2026 group business was already on the books.
At Grand Geneva, the company opened its new 11-hole Wee Nip short golf course in May. Greg Marcus said the amenity had received a positive early reception and was already attracting bookings for group events and outings in 2027. Rounds played at the resort’s two 18-hole courses increased more than 11% in the second quarter, while greens-fee revenue rose 20%.
Free Cash Flow Rises as Capital Spending Declines
Cash flow from operations increased to $54 million from $31.6 million in the prior-year quarter, primarily reflecting higher earnings. Capital expenditures fell to $10 million from $16.9 million and were focused largely on maintenance and return-on-investment projects.
Management now expects 2026 capital expenditures of $45 million to $50 million. For the first half of the year, capital spending was down $23 million from the first half of 2025.
Second-quarter free cash flow reached $44 million, nearly tripling from the prior-year period. First-half free cash flow totaled $22 million, a $65 million improvement from the first half of fiscal 2025.
Marcus ended the quarter with approximately $26 million in cash and more than $245 million in total liquidity. Its debt-to-capitalization ratio was 25%, and net leverage was 1.1 times.
Greg Marcus said the company intends to pursue value-accretive investments and acquisitions in both business segments when suitable opportunities arise. If it does not find actionable investments, he said the company expects to return excess capital to shareholders through its dividend and share repurchases.
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.
