Blockbuster Tests $18 Monthly Rental Fee
Dallas, Blockbuster Inc. has began advertising and testing on line a monthly subscription fee of $18 for unlimited DVD rentals. The company said the test does not mean that Blockbuster intends to adopt the new price, which is a $3 increase from its current price of $14.99, according to reports. Customers who respond to the ads are informed that it is a test, and are still charged the current price.
If adopted, the price increase would parallel Blockbuster’s fees with those of rival Netflix Inc., which still dominated the market with 3 million subscribers compared to Blockbuster’s 750,000.
Bitter Break Up for Sears and IT Service
New York City, Sears, Roebuck & Co.’s massive IT outsourcing contract with Computer Sciences Corp. to manage its computer and phone networks and Web sites has descended into finger-pointing and acrimony. Computer Sciences has said the retailer ended the $1.6 billion contract to avoid paying millions in termination fees. Previously, Sears said that it canceled its 10-year deal with Computer Sciences because the contractor failed in certain duties, charges that Computer Sciences denies. A federal judge denied Computer Sciences’ suit to stop Sears from ending the contract for cause, Sears said Friday.
Tuesday Afternoon Earnings Roundup
Atlanta, The Home Depot posted net earnings of $1.2 billion in the first quarter, up 16.3% from the year-ago period. Sales grew 8.1% to $19 billion on same-store sales growth of 2.1%.
• J.C. Penney Co. reported income from continuing operations of $172 million in the first quarter, more than triple the $41 million it posted in the year-ago period. Sales rose 3.9% to $4.19 billion on the strength of 3% comps growth.
• Staples Inc. posted first-quarter net income of $159 million, up 26.8% from the year before. Sales increased 13% to $3.9 billion on same-store sales growth of 4%.
• The TJX Cos. posted an 11% fall in first-quarter net income to $149.3 million. The decline came despite a 9% improvement in net sales to $3.7 billion and comps growth of 3%.
• BJ’s Wholesale Club Inc. recorded first-quarter net income of $18.6 million, up 15.5% from the same quarter a year before. Sales increased 9.8% to $1.8 billion on a comps improvement of 5.8%.
• Barnes & Noble Inc. recorded a 37% increase in net earnings from continuing operations to $9.9 million in the first quarter. Sales rose 4% to $1.1 billion on same-store sales growth of 2.2%.
• Dick’s Sporting Goods Inc. posted net income of $12.2 million in the first quarter, up 15.1% from the year-ago period. Sales grew 57% to $570.8 million, due to 3.2% same-store sales growth and the addition of the recently acquired Galyan’s chain.
• The Cato Corp. reported first-quarter net income of $18.4 million, up 9.5% from the same quarter a year before. Sales grew 5% to $215.1 million. Same-store sales remained flat.