There sure are a lot of zombie movies at your local Blockbuster
I'm not making this stuff up.
Last year's operating loss became a $0.20-a-share profit. Revenue fell by 5% to $1.4 billion, but that is mostly the result of the company closing more than 400 company-owned stores. Comps actually rose by 2.9%. This is the first time in five years that sales at the domestic store level have clocked in higher.
And, as a cherry on top, Blockbuster's Total Access is actually now profitable. The company's move last year to raise prices and scale back perks for its subscription plan may have cost it members and momentum, but if coming in a distant second to Netflix
The better-than-expected profits (analysts were looking for earnings of just $0.15 a share) will no doubt find analysts ratcheting up their earnings targets. It is what they have been doing in recent months, as CEO Jim Keyes' retail-friendly initiatives have been working.
You see the retail success at the store level. Rental comps were up 0.4%, but merchandising revenue soared 19.7% higher at the unit level.
Investors may be skeptical about the company's merchandising bent. Channeling GameStop
I seemed to be in a thin crowd when I proclaimed "I believe in Blockbuster" on Monday. Seeing the stock open nearly 7% higher on today's report, I guess I'm not alone anymore.
Keep gnawing on those brains, Blockbuster. They're apparently making us all a little smarter.
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Longtime Fool contributor Rick Munarriz owns shares in Netflix. He also is an early adopter of the service, subscribing since 2002. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy promises not to snack on your brain.