GameStop’s sales surged in Q3
By Staff -- Gifts and Dec, 11/21/2006 1:23:00 PM
GRAPEVINE, Texas—Video game retailer GameStop Corp. overcame what should have been a slow period in advance of this month’s release of two major next generation video game systems, recording an 89 percent sales jump in the third quarter.
For the three month period ended on Oct. 28, GameStop’s sales topped $1.01 billion, up from $534.2 million in the corresponding period of 2005, with comparable store sales up nearly 9 percent. The retailer’s performance was driven by a 69 percent jump in hardware sales as consumers continued to purchase Microsoft’s Xbox 360 and Nintendo’s DS Lite despite the impending arrival of cutting edge console Wii and PlayStation 3. Traditionally, the video game business would have expected demand for those older systems to drop as the release of newer systems neared.
“Never before in video game history have we had so many outstanding consoles to energize the existing gamers, entice the upgrade customer and attract new customers,” said GameStop chairman and CEO R. Richard Fontaine of the continuing success of older hardware. “We have a contemporary platform attracting core customers, a 7-year-old platform (Playstation 2) attracting a value customer, hand-helds attracting a broader demographic gamer, and the latest revolutionary systems just coming to market.”
As a result of the strong hardware sales, video game software sales rose 14 percent during the period.
GameStop’s net earnings for the quarter were $13.6 million, a figure that includes merger-related expenses of $2.9 million and debt retirement costs related to a bond buy-back program of $3.4 million.
The retailer expects its fourth quarter comparable store sales to rise by 14 to 18 percent.
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