Movie Gallery Releases Partial Q3 Results14 Nov, 2006 By: Jessica Wolf
The country's No. 2 rental chain Movie Gallery today released cursory results for the third quarter of 2006.
But the company has put off announcing full financial results or filing the 10Q for the period due to “an accounting matter currently under review,” according to a Gallery statement. The accounting issue has to do with reporting end-of-lease terms for 5,000 stores.
Overall, revenue for the quarter was up a slight 1.8% to $583 million, compared to $572.4 million in revenue during the third quarter of 2005.
Gross profit for the 2006 third quarter was down less than 1% to $363.2 million compared to 2005's $366.1 million.
Overall, same-store total revenue was down 0.4% compared to the prior year. Movie Gallery-branded locations fared better than Hollywood Video stores in the quarter. Same-store sales increased 3% at Gallery locations and decreased 1.9% at Hollywood Video-branded outlets.
Still, company executives are bullish.
“We are encouraged by the sequential quarterly improvement during 2006 that we have seen in our same-store sales across both brands as well as our continued progress on various cost savings efforts and our previously announced real estate initiatives,” said Joe Malugen, Movie Gallery chairman, president and CEO. “While our industry continues to face a number of near-term challenges, we are optimistic that the strong new release title slate and the launch of new game platforms will help drive even greater customer traffic through the fourth quarter of 2006 and into 2007.”
The company plans to release full financial details on the quarter as soon as possible as it works with an independent auditor to assess the impact of complying with reporting standards for its end-of-term store lease obligations.