Can Movie Box Office Return To Pre-Pandemic Levels? Marcus CEO “Not Ready To Throw The Towel In Yet”
Marcus Corporation CEO Greg Marcus says he’s encouraged by the recent diversity and consistency of theatrical films and is “not ready to throw in the towel yet” on the notion of box office returning to pre-pandemic levels.
Along with one of the top national movie theater circuits, the company also operates a string of hotel properties. Speaking on the company’s fourth-quarter earnings call with Wall Street analysts, Marcus noted a run of “nice, fun, short mid-sized films” like A Man Called Otto. “Re-habitualizing the moviegoer” with a diverse range of film offerings will be key to the box office recovery, he said. “You can’t just feed us dinner — we need lunch and we need breakfast, too, to have a rounded nutritional diet.” Doing so will be a painstaking and incremental process, he conceded.
Marcus reported mixed earnings for the quarter, in part due to a downturn in wide-release films compared with 2021, with attendance dropping 24%. Revenue compared with the prior-year quarter slumped 4% to $162.9 million, with the number of wide releases dipping from 26 to 22 and difficult comparisons with 2021’s Spider Man: No Way Home haul. Only about a week-and-a-half of grosses from Avatar: The Way of Water counted in the quarter, which ended December 31.
Net loss per share reached 30 cents in the quarter, wider than the 17 cents Wall Street analysts had expected, and a swing into the red from earnings of 18 cents a share in the 2021 quarter. The revenue number beat analysts’ forecasts.
Shares in Marcus, which have been depressed since the onset of Covid in early 2020, shed 4% on the earnings news on above-average trading volume, closing at $15.33.
“I’m not ready to throw the towel in yet on what the future’s going to look like,” the CEO said when asked about the “new normal” in movie theaters. “All of a sudden, the tone is changing in a way I haven’t heard in a while.” Referring to Netflix, he added, “For the last number of years, frankly, Wall Street was saying, ‘Be like that company that gets $1,200 a subscriber on their stock value. … Don’t worry about anything else. Don’t worry about maximizing the value of your content. Don’t worry about your profitability. Forget any other revenue stream — just get that one subscriber revenue stream.'” The new emphasis on profits and wringing cash out of the full ecosystem is spurring more than just traditional studios to look to theaters, he added, noting Amazon’s upcoming wide release for Air.
CFO Chad Paris cautioned that “supply chain” issues would still likely keep 2023 from returning to pre-pandemic levels, but said it could soon as overall output continues to increase. In 2019, the last full year before Covid, total grosses were $11.4 billion, near an all-time record, but 2022 mustered just $7.5 billion. Through last Sunday, grosses were running about 47% ahead of last year’s at the same point. “We’ll see where ’24 and ’25 end up,” Paris added, “but this is not the stabilized number.”
Cautioned Marcus during his prepared remarks on the call, “While we are clearly on the way back, that road back will not necessarily be a straight line.”