Hollywood Video: Rental Declines Erode Q4 Results, Dampen '04 Projections6 Jan, 2004 By: Erik Gruenwedel
Despite an unexpected 14 percent increase in same-store merchandise sales, Hollywood Entertainment Corp. (HEC), parent to Hollywood Video and Game Crazy outlets, said eroding same-store rentals negatively impacted fourth-quarter results (ended Dec. 31, 2003) and are projected to dampen earnings in 2004.
Hollywood, which will release actual fourth-quarter and fiscal-year results Jan. 29, said it experienced a 2 percent decline in same-store rentals for the quarter.
Earnings per share (EPS) for the quarter were 36 cents, down from a projected EPS of 38 cents to 40 cents, according to Mark Wattles, founder and CEO of the Portland, Ore.-based rentailer.
Last month, Hollywood projected flat same-store rental comps for 2004, with 33 cents to 37 cents EPS for the first quarter and 5 percent earnings growth.
“We now believe there is risk in that forecast,” Wattles said.