A Movie Theater Chain Poised to Weather 2021’s Disruptions

While shutdowns are saddling exhibition giants like AMC and Cinemark with rent expenses in addition to lost revenue, Marcus Theatres —  he fourth-largest circuitin the U.S. — owns real estate behind the majority of its screens and could be a buyer A Movie Theater Chain Poised to Weather 2021’s Disruptions Movie theater chains are staring down an unprecedented crisis, as pandemic shutdowns are forcing operators in some areas to close while awaiting local authorities’ COVID-19 guidance. So it was no surprise that when Marcus
Corp. — the fourth-largest circuit in the U.S., with 1,110 screens in 17 states — reported its latest financials on Nov. 3, CFO Doug Neis told investors the pandemic had led to “the two worst quarters we’ve ever experienced in our 85-year history.” Marcus stock fell 58 percent in 2020, while shares of the nation’s largest chain, AMC, dropped 71 percent and rival Cinemark’s closed off at 49 percent. But Wall Street observers are notably bullish on the Wisconsin-based Marcus when a pandemic recovery arrives, given its tradition of conservative financial management. The Marcus Corp., which also includes a hotel division, operates in mostly suburban markets and owns, rather than rents or leases, the real estate behind 62 percent of its screens. That means less potential conflict when negotiating rent or lease abatements with landlords. “Owning the majority of our real estate is a significant advantage for us relative to our peers as it keeps our monthly fixed lease payments low and provides significant underlying credit support for our balance sheet,” president and CEO Greg Marcus tells THR. B. Riley FBR analyst Eric Wold in July upgraded his rating on the stock of Marcus from “neutral” to “buy,” saying he was looking “beyond the short-term disruption,” while continuing to rate AMC Theatres and Cinemark at “neutral.” Wold says, “Not only do !

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