Movie Gallery Q4 Same-Store Revenue Better Than Expected7 Jan, 2004 By: Holly J. Wagner
Same-store revenue at Movie Gallery increased 6 percent in the fourth quarter ended Jan. 4, exceeding the No. 3 rentailer's established guidance of a low single-digit increase for the quarter and prompting an upward revision, the company reported today.
Same-store rental revenue for the quarter increased 5.5 percent, a favorable showing against No. 2 chain Hollywood Video, which saw a 2 percent dip in rentals for the same quarter.
Movie Gallery executives attributed the overall performance to the continuing product shift to DVD and a strong fourth-quarter release schedule for new movie titles. In addition, currency exchange gains in its Canadian operations accounted for about 100 basis points of the increase.
The company also announced that it expects net income per diluted share for the fourth quarter and fiscal 2003 to be at least 48 cents and $1.44, respectively.
The better-than-expected same-store results prompted Movie Gallery to increase its guidance for adjusted net income per diluted share for the fourth quarter of fiscal 2003 to at least 49 cents from the prior announced range of 45 cents to 47 cents, bringing guidance for full-year fiscal 2003 to at least $1.58. The adjusted net income per diluted share for the fourth quarter and full-year 2003 excludes non-cash expenses of 1 cent and 11 cents, respectively, for the change in accounting estimate for rental inventory that occurred in the fourth quarter of 2002. It also excludes non-cash stock option compensation expense of 3 cents per diluted share for full-year 2003.
Executives believe their calculation of adjusted net income per share provides a better measure of the company's ongoing performance and provides better comparability to prior periods because it excludes items not related to the company's core business operations.
Movie Gallery plans to release final financial results for the fourth quarter and the year Feb. 19.