GameStop – GME – Solid sales growth as well as strong margins in new retail offerings and digital channels
NYSE: GME), the world’s largest multichannel video game retailer, today reported sales and earnings for the second quarter ended July 28, 2012.
GME – Second Quarter Results
Total global sales for the second quarter of 2012 were $1.55 billion compared to $1.74 billion in the prior year quarter, a decrease of 11.1%. Consolidated comparable store sales decreased 9.3% compared to the prior year quarter. As expected, slow traffic due to a lack of new game releases caused sales of new software and hardware to decline sharply. While outperforming the new category as well as the overall market, pre-owned sales decreased 11.2%.
Other category sales, up 40.6% during the quarter, were primarily driven by new business channels. Digital receipts increased 27% to $134 million. Mobile sales, made up of tablet and pre-owned iDevice products, were $29 million, on track to reach the company’s 2012 forecast for mobile sales of $150 to $200 million.
Paul Raines, chief executive officer, stated, “We continue to see solid sales growth as well as strong margins in our new retail offerings and digital channels. We are focused on staying ahead of the curve as the competitive landscape evolves and we manage through the trough of the console cycle. Finally, the ongoing share buyback and increase in dividend demonstrate our confidence in the future of GameStop and our commitment to improving total shareholder returns.”
GameStop’s net earnings for the second quarter were $21.0 million compared to net earnings of $30.9 million in the prior year quarter. Diluted earnings per share were $0.16, compared to diluted earnings per share of $0.22 in the prior year quarter.
GME – Earnings Guidance
For the third quarter of fiscal 2012, GameStop expects comparable store sales to range from -10.0% to -5.0%. Diluted earnings per share are expected to range from $0.28 to $0.36.
Based on the current number of shares outstanding, the company is maintaining its previously announced full year diluted earnings per share guidance range of $3.10 to $3.30. Full year comparable store sales are expected to range from -10.0% to -2.0%.
About GameStop – GME
GameStop Corp. (GME), a Fortune 500 and S&P 500 company headquartered in Grapevine, Texas, is the world’s largest multichannel video game retailer. GameStop’s retail network and family of brands include 6,628 company-operated stores in 15 countries worldwide and online at www.GameStop.com. The network also includes: www.Kongregate.com, a leading browser-based game site; Game Informer(R) magazine, the leading multi-platform video game publication; Spawn Labs, a streaming technology company; and a digital PC game distribution platform available at www.GameStop.com/pc.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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