Outerwall Slashes Guidance Amid Slumping DVD Rentals Redbox Prexy Exits Company

BELLEVUE, WA -- Outerwall Inc. lowered its 2015 earnings guidance after disappointing performance by its Redbox DVD-rental business. The company also announced that Redbox president Mark Horak will leave the video vending division after serving less than two years in the top post.

Outerwall said Redbox's third-quarter results were impacted by "the worst theatrical box office in Redbox kiosks in four years," at a time when more consumers are streaming video over the Internet.

The Bellevue, WA, company said its Redbox business has not met company expectations for the current quarter, based on results through the end of November.

Outerwall lowered its 2015 earnings projections to $7.65 to $8.15 per share, down from a range of $8.82 to $9.52. It cut its revenue guidance to $2.17 billion to $2.19 billion, down from $2.21 billion to $2.24 billion.

The company is also shutting down its SampleIt kiosks that sold $1 samples of beauty and cosmetics products accompanied by coupons, less than a year after launching that business.

Outerwall also operates Coinstar coin-counting kiosks and ecoATM kiosks for electronics recycling.

Horak, a former home entertainment executive at Warner Bros., joined Redbox in March 2014. Outerwall chief executive Erik Prusch will be interim president of Redbox.

Redbox became the nation's largest DVD renter as Blockbuster stores closed and Netflix Inc. shifted its focus to streaming. Redbox's own digital efforts, a venture with Verizon Communications Inc. called Redbox Instant by Verizon, shut down in late 2014.