Movie Gallery Poised for Growth21 Feb, 2002 By: Joan Villa
Movie Gallery boosted same-store sales 2.4 percent in the fourth quarter ended Jan. 6 and tripled pro forma net income to $9.5 million from $3 million in the year-ago period.
Benefiting from a 14-week quarter versus a 13-week quarter a year ago, the nation's third largest rental chain increased revenues 27.6 percent to $108 million compared to the fourth quarter ending Dec. 31, 2000. Net income for the quarter climbed 133 percent to 28 cents per share.
DVD finished the quarter at 23 percent of the chain's rental revenue, tallying 750,000 rental turns during New Year's week, said chairman and CEO Joe Malugen.
"We expect DVD to grow from 23 percent to over 35 percent by the end of this year and we will continue to take advantage of the low pricing structure of DVD to transition our inventory to meet this demand," he said.
Game rentals and sales account for 10 percent of the chain's revenues and is expected to reach previous game peaks of 12 to 13 percent by the end of 2002, Malugen added.
The company plans to open at least 125 new stores this year, after completing the acquisition of 320 Video Update stores in December. Movie Gallery operated 1,415 stores at the end of 2001 versus 1,020 locations in December 2000.