GameStop Reports Soft Holiday Sales

Cites tough prior-year comparisons.
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No. 1 video gaming specialty chain GameStop said tough comparisons to fall 2013, when PS4 and Xbox One launched, contributed to a soft holiday sales tally.

Grapevine, Texas — No. 1 video gaming specialty chain GameStop said tough comparisons to fall 2013, when PS4 and Xbox One launched, contributed to a soft holiday sales tally.

Total sales slipped 6.7 percent to $2.9 billion for the nine weeks ended Jan. 3. Sales were off 4 percent excluding the impact of unfavorable currency fluctuations.

Consolidated comp-store sales declined 3.1 percent, including a 3.3 percent dip in the U.S.

Comps were weakest in November, falling 12 percent as the company overlapped the PS4 and Xbox One console introductions, but rebounded in December with a 4.4 percent gain.

“During the holiday period, consumer demand for video games was strong, resulting in new software sales growth," said CEO Paul Raines. “We expect that trend to continue into the first quarter.”

Broken out by category, new software sales grew 5.8 percent for the nine weeks (8.9 percent in constant currency), driven by a 94 percent increase in PS4 and Xbox One software, led by titles such as Activision’s “Call of Duty: Advanced Warfare,” Rockstar’s “Grand Theft Auto V” and Ubisoft’s “Far Cry 4.”

Sales of new hardware declined 32 percent (29.8 percent in constant currency), due primarily to overlapping the 2013 console launches and to lower unit price points. The chain said it saw continued strength in next-generation hardware, with December unit volume up 31.3 percent year over year.

The pre-owned/value category decreased 1.3 percent but rose by the same amount domestically in constant currency.

Sales in GameStop’s combined “mobile and CE” category rose 28 percent, driven by a 76 percent increase in revenue from its “technology brands” segment, which consists of the Simply Mac, Spring Mobile and Cricket retail chains.

GameStop operates 60 Simply Mac Apple-products stores, 358 AT&T Mobile stores, and 63 Cricket Wireless pre-paid AT&T stores.

It also operates 6,600 flagship GameStop stores in 14 countries.

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