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Jun 25, 2020
Marcus Q2 2020 Earnings Report
Reported results for the second quarter of fiscal 2020, which was significantly impacted by the COVID-19 pandemic, with most theatres and hotels closed.
Key Takeaways
The Marcus Corporation reported a challenging second quarter due to the COVID-19 pandemic, which led to the closure of most of its theatres and hotels. The company focused on maintaining a strong balance sheet and enhancing liquidity to weather the crisis, while also implementing phased reopening plans with enhanced safety protocols.
The company's net-debt-to-capitalization ratio was 32% at the end of the second quarter.
Liquidity as of June 25, 2020, included approximately $170 million in cash and revolving credit availability.
Marcus Theatres began implementing its phased reopening plan on June 19, 2020, with enhanced health and safety protocols.
Marcus Hotels & Resorts reopened four company-owned hotels in June, with additional reopenings expected in the third quarter.
Forward Guidance
The company anticipates benefiting from the Coronavirus Aid, Relief, and Economic Security Act of 2020 through income tax benefits in fiscal years 2020 and 2021. They expect to reopen the majority of their theatres in time for new movie releases later this month and the coming months. Most cancelled group bookings that were not for one-time events are rebooking for future dates, including for the rescheduled Ryder Cup in September 2021.
Positive Outlook
- New film releases expected later this month and coming months
- Rebooking of cancelled events to future dates
- Properties are uniquely positioned in their respective markets to recapture demand as travel recovers.
- The company expects to benefit from the Coronavirus Aid, Relief, and Economic Security Act of 2020.
- Group pace for 2021 is only slightly behind the comparable period last year.
Challenges Ahead
- The adverse effects of the COVID-19 pandemic on our theatre and hotels and resorts businesses
- The duration of the COVID-19 pandemic and related government restrictions and social distancing requirements and the level of customer demand following the relaxation of such requirements
Historical Earnings Impact
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Avg. Return Before/After Earnings
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