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GameStop’s Q4 Comps Up 8%

Grapevine, Texas – GameStop said the holiday launches of Xbox One and PlayStation 4 drove higher sales and comps in the fourth quarter.

During the period the No. 1 video gaming specialty retailer also completed the acquisitions of two CE chains — Simply Mac and Spring Mobile — and also announced plans to close about 132 GameStop locations, or 2 percent of its store base, this year. The company operates more than 6,600 stores in 15 countries.

For the three months, ended Feb. 1, profits fell 15.5 percent to $220.5 million, reflecting nearly $29 million in asset impairment charges related to store closings and the shutdown of Spawn Labs, the retailer’s Cloud gaming division.

Total global sales grew 3.4 percent to $3.7 billion and comps increased 7.8 percent, raising the chain’s market share to an all-time high, CEO Paul Raines reported.

For the full fiscal year, net earnings topped $354.2 million, compared with a year-ago net loss of $269.7 million. Total global sales edged up 1.7 percent to $9 billion; comps increased 3.8 percent; and sales from its three-year-old digital and mobile operations surpassed $1 billion for the first time, Raines said.

Broken out by category, sales of new video game software declined 2.8 percent and sales of pre-owned and value products declined 4.1 percent, reflecting a decrease in store traffic and a dearth of new titles prior to the fourth quarter.

Digital receipts increased 15.1 percent to $724.4 million, and mobile and CE sales, which includes revenue from GameStop’s other retail chains, soared 51.6 percent last year.

The retail chains include the aforementioned Simply Mac, a 23-store authorized Apple reseller based in Salt Lake City; Spring Mobile, which sells post-paid AT&T services and products through 164 AT&T-branded stores; and Aio Wireless, which sells AT&T’s Aio-branded prepaid wireless services, devices and accessories. GameStop opened 31 Aio Wireless stores last year.

Looking ahead, the company is projecting full-year profits to grow between 12 and 22 percent, total sales to increase between 8 and 14 percent, and comps to increase between 6 and 12 percent. GameStop can expect stiffer competition this year as Walmart emulates its model and begins buying and selling pre-owned games.