For the first nine months of Marcus Corp.'s fiscal year, revenues are up 6.6% to $282.8 million and earnings are $0.54 per share, $0.12 less than the first nine months of the previous fiscal year.

"Marcus Theatres had an excellent third quarter due to an outstanding selection of films with broad consumer appeal," says chairman and CEO Stephen H. Marcus. "However, this strong performance was not enough to offset a decline in operating income in our two lodging divisions. The harsh winter weather in the Midwest, significantly higher gas and electric utility costs and a general softness in the economy impacted the results of both Baymont Inns & Suites and Marcus Hotels and Resorts."

The theater division, Marcus Theatres, posted a 24.3% revenue increase in the quarter ending Feb. 22 and a 38.5% jump in operating iincome. "We had a strong holiday season, with hit movies including Cast Away, How the Grinch Stole Christmas and What Women Want," Marcus says. "This momentum continued throughout the quarter, which ended with the introduction of Hannibal, another solid hit at the box office. After two prior quarters of weak film product, the rebound in Marcus Theatres' performance underscores a point we have been making for some time: the investments we have made in stadium seating and digital sound position Marcus Theatres to achieve solid performance--all we need is a good selection of movies from Hollywood."

In addition to slumping hotel reservations and increased costs, the company also incurred costs in launching its Guest Ovations reward program. Repositioning Baymont's brand name from an economy hotel also is affecting the bottom line.

"We continued our recent pattern of double-digit rate increases in the third quarter, which has succeeded in moving 179-property Baymont Inns & Suites from the economy lodging segment into the mid-priced lodging segment," Marcus says. "The higher rates have caused a short-term loss of occupancy while we ramp-up new sales and marketing programs designed to encourage more mid-market guests to try Baymont."