|View printer-friendly version|
|GameStop Reports Record 2010 First Quarter Sales and Earnings|
Earnings Per Share Grow 14%
GRAPEVINE, Texas, May 20, 2010 (BUSINESS WIRE) --GameStop Corp. (NYSE: GME), the world's largest video game and entertainment software retailer, today reported sales and earnings for the first quarter ended May 1, 2010.
Total sales for the first quarter increased 5.1% to $2.08 billion, in comparison to $1.98 billion in the prior year quarter. Comparable store sales decreased 1.6%, due to a decline in hardware price points and hardware supply constraints. However, new video game software sales increased 13.3%, driven by a very strong slate of new games with Battlefield Bad Company 2 from Electronic Arts, Sony's God of War III, Final Fantasy XIII by Square Enix, Pokèmon SoulSilver and HeartGold from Nintendo, and Take 2's Bioshock 2 making up the top sellers.
Net earnings for the first quarter increased 6.8% to $75.2 million, as compared to net earnings of $70.4 million, including debt retirement costs of $2.9 million ($1.8 million, net of tax benefits) in the prior year quarter. Diluted earnings per share increased 14.3% to $0.48, as compared to $0.42 in the prior year quarter, including debt retirement costs of $0.01 per diluted share. Over the past four years, first quarter earnings have grown at a compounded annual growth rate of 62%.
Daniel DeMatteo, GameStop's Chief Executive Officer, stated, "I am pleased that our earnings have achieved the high end of guidance and total company sales have exceeded $2 billion for the first time in a non-holiday quarter. By maintaining a sharp focus on our customer needs and overall business execution, our strong brick and mortar business continues to provide the capital needed to invest in new stores as well as execute our strategic plan to incorporate digital gaming into our global operations.
"The in-store Legends of Zork test proved highly successful in economically acquiring and converting our customers to browser game players. Additionally, at the end of this month, GameStop will be marketing and selling downloadable content in a group of test stores. Of equal importance, our new customer loyalty program will launch in select markets. Altogether, we continue to deliver a superior shopping experience and are introducing our customers to the digital options for gaming."
Paul Raines, Chief Operating Officer, said, "Our store associates did an outstanding job of executing our 'Go Big' marketing campaigns to promote hot new titles. Their effectiveness can be measured by the significant day one, week one and overall market share GameStop captured of this quarter's new releases. Our unique buy-sell-trade model continues to provide a strong value proposition for new game buyers."
For the second quarter of fiscal 2010, the company expects comparable store sales to range from -2.0% to +2.0%. Diluted earnings per share are expected to range from $0.25 to $0.27, a 9% to 17% increase over the prior year quarter.
Based on our current industry analysis and expected strength of several upcoming new video game software releases, the company is projecting third quarter fiscal 2010 diluted earnings per share to range from $0.38 to $0.41, a 19% to 28% increase over the prior year quarter.
GameStop is reiterating its full year diluted earnings per share guidance range of $2.58 to $2.68, representing a 14% to 18% increase over fiscal 2009. Full year comparable store sales are still expected to range from flat to +2.0%.
Headquartered in Grapevine, TX, GameStop Corp., a Fortune 500 and S&P 500 company, is the world's largest video game and entertainment software retailer. The company operates 6,486 retail stores in 17 countries worldwide. The company also operates e-commerce sites, including GameStop.com, and publishes Game Informer(R) magazine, a leading multi-platform video game publication. GameStop Corp. sells new and used video game software, hardware and accessories for video game systems from Sony, Nintendo, and Microsoft. In addition, the company sells PC entertainment software, related accessories and other merchandise. General information on GameStop Corp. can be obtained at the company's corporate website: http://www.gamestopcorp.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, the outlook for fiscal 2010, future financial and operating results, projected store openings, the company's plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of GameStop's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. GameStop undertakes no obligation to publicly update or revise any forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the inability to obtain sufficient quantities of product to meet consumer demand, including console hardware; the timing of release of video game titles for next generation consoles; the risks associated with expanded international operations and the integration of acquisitions; the impact of increased competition and changing technology, including alternative methods of distribution, in the video game industry; and economic and other events that could reduce or impact consumer demand. Additional factors that could cause GameStop's results to differ materially from those described in the forward-looking statements can be found in GameStop's Annual Report on Form 10-K for the fiscal year ended January 30, 2010 filed with the SEC and available at the SEC's Internet site at http://www.sec.gov or http://investor.gamestop.com.
SOURCE: GameStop Corp.