The Holidays Were Not Kind to Blockbuster As Performance Was "Well Below Expectations"
Shortly before the end of the year, Blockbuster CEO Jim Keyes told me that the Dallas-based videotailer is a "football team that's rebuilding. At first, the press is all over you. They're gonna hammer you, tell you you're dead, you'll never be as good as you were. Meanwhile, you're slowly building positions with strong players, and in three years you've got a winning team." If that's the case, consider this the latest injury report.
Shortly after the closing bell today, Keyes reported that holiday sales were way off -- meaning, 2009's expected net loss will be steeper than previously thought (the figure will likely come in close to $193 million). Said Keyes in a statement:
"During the fourth quarter we redirected our efforts to restore top line performance, especially for the month of December as we tried to leverage the holiday season. We increased inventory levels to support a higher in stock availability and invested in advertising to drive traffic in stores and online. In spite of these efforts, our performance during the holidays was well below expectations."
The holiday dip was especially significant because Blockbuster usually gets 30 percent of its annual revenue during the fourth quarter. In related news, the stock remains affordable.