Movie Gallery said Tues. most of its stores in the Gulf region ha...

Hurricane Katrina “will not be material to its short-term revenues nor affect its long-term financial condition.” The company runs 328 stores in Ala., La. and Miss. under the Movie Gallery and Hollywood Video names, but it said “the vast majority of these stores are located outside of the areas affected by” the hurricane. Movie Gallery said it resumed operations at 12 of the 21 stores closed due to power outages and other storm damage. But it said about 3 stores were “operating under a dusk to dawn curfew and 6 stores remain closed.” It said “the exact amount of damage to these stores is still unclear as some stores are located in restricted areas.” Regardless, it said, “all of these stores represent less than half of one percent of Movie Gallery’s 4,800 stores across North America.” The company this month released preliminary 3rd and 4th quarter same- store sales estimates weaker than analysts had expected, saying it expects Q3 comparable store sales to decline 8- 10% from a year ago as “the current slump” in theatrical box office revenue continues” (CED Sept 19 p9). Separately, rival Blockbuster didn’t respond right away to a request for comment about a Wall Street Journal report in which CEO John Antioco characterized the rental business as “in the tank.” The report also quoted him as saying that although he doesn’t expect his company to default on payments due to Hollywood movie studios, those studios “have a legitimate reason to be concerned about the entire video business.” Blockbuster shares fell after the report came out. In late afternoon trading Tues., shares were down 5.63% at $4.36.