Blockbuster reports second quarter loss

DALLAS Blockbuster Entertainment reported a larger-than expected loss for its second quarter attributed in part to higher overhead costs.

The 7,600-store rental chain posted a loss of $44.7 million for the quarter ended July 6 compared to a $34.2 million loss last year. Total sales rose 3.3%. Blockbuster added 100,000 subscribers to its Total Access online rental program, boosting its number of subscribers to 3.2 million. The company also launched a test of in-store DVD download kiosks at several stores in Dallas.

“We’re growing our core rental business, building our retail business slowly but surely and proactively transforming toward digital,” said ceo James Keyes in an Aug. 7 conference call.

While most trends were positive, the chain was hurt by higher merchandise costs, which were 19% of sales compared to 17% of sales during the same quarter last year. Blockbuster has lost $2.1 million year-to-date but expects to report a profit for the full year.