Grapevine, Texas - No. 1 specialty gaming retailer GameStop reported
single-digit sales and earnings increases for the second quarter, ended July
Profits increased 4.2 percent to
$40.3 million while net sales rose 3.4 percent to $1.8 billion. Same-store
sales edged up nearly 1 percent on purchases of new hardware systems and new
software titles. Sales of new titles increased 5.3 percent during the quarter,
reflecting "strong market share gains," the company said.
CEO J. Paul Raines said the results "demonstrate the resiliency of our
business model as we achieved both top-line and earnings growth despite the
ongoing volatility in the global economy."
He said U.S. operations were "strong relative to the industry with solid
comparable store sales and continued new video game market share gains," while
the company continues to focus internationally on the execution of its
used-game model to improve operational efficiencies.
Executive chairman Dan DeMatteo said GameStop will accelerate the launch
of two initiatives -- a PowerUp Rewards customer loyalty program and in-store
sales of downloadable content -- due to
"outstanding initial results," and will complete their national rollouts in the
third quarter. He also announced the acquisition of Kongregate, a social gaming
destination, to advance the company's digital strategy.
The company also completed its
$300 million share repurchase program during the quarter, and year-to-date has
opened 99 net new stores, including 48 in the U.S., bringing the total store
count to 6,549 locations in 17 countries.
Looking ahead, GameStop continues to project a 14 percent to 18 percent
increase in full-year earnings per share over fiscal 2009, based on the new
customer initiatives and the launch of Microsoft's Kinect, the new
motion- and voice-sensor interface for Xbox. The company is also projecting a 3 percent to 6 percent increase in
same-store sales for the third quarter.
The chain said its top-five selling games during the second quarter were
Rockstar Games' Red Dead Redemption;
Nintendo's Super Mario Galaxy 2;
THQ's UFC Undisputed 2010; StarCraft
II: Wings of Liberty, by Blizzard Entertainment; and EA Sports' NCAA Football 11.