Blockbuster’s Same-Store Sales Shrink In Q3, While Losses Grow

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Blockbuster’s “transformation” plan to close stores and shift to digital and kiosk distribution can’t come fast enough. The company’s loss widened from 11-cents per share in Q308, to 60-cents per share in Q309. Overall revenues were down 21 percent year-over-year — a slump Blockbuster (NYSE: BBI) attributed primarily to an 18.3 percent drop in same-store sales, amid increased usage of services like *Netflix* and Redbox. The news sent the company’s shares down by 12 percent in after-hours trading.

3Q 2009 3Q 2008
EPS -$0.60 -$0.11
Net Income -$116.8M -$20.6M
Revenue $910M $1.16B

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Blockbuster sold off Xtra-vision Limited, its 200-store rental division in Ireland during the quarter — partly to stay focused on its U.S. business — but also in an effort to gain more “liquidity.” It also paid off $50 million in debt it owed to *Viacom*, and the tactics worked, as Blockbuster ended Q3 with $141 million in cash and cash equivalents on the books. The company’s balance for Q308 was just $99 million. It also reduced operating expenses by 15 percent year-over-year, including a $12 million reduction in ad spending.

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