Blockbuster turns profit, grows sales
EmptyBlockbuster might have proved Thursday that rumors of the death of the video rental store have been greatly exaggerated.
The giant of its industry not only turned a healthy profit in its first quarter but also grew same-store sales in the U.S. for the first time in five years.
Still, investors were unimpressed with Thursday's announcement.
The company earned $42.6 million in the quarter, compared with a loss of $51.8 million a year ago. Revenue fell 5% to $1.4 billion because of the sale of 412 stores. The results missed expectations on the top line but bested them on the bottom line.
Blockbuster CEO James Keyes hailed the 2.9% same-store sales increase at domestic stores as proof that increased efforts to sell merchandise, as opposed to merely renting, is a worthy endeavor.
That, of course, is the thrust of Blockbuster's argument that it makes sense to merge with Circuit City, and Keyes said the company's due diligence in that regard is in full swing.
"We remain confident in our ability to transform Blockbuster with or without this transaction," Keyes told analysts Thursday. (partialdiff)