GameStop sets holiday sales record
By Staff -- Gifts and Dec, 1/8/2009 3:38:00 PM
GRAPEVINE, Texas—GameStop tallied record sales results for the nine-week holiday period, the video game retailer said Thursday.
During the 2008 holiday period running from Nov. 2, 2008, through Jan. 3, 2009, GameStop’s total sales were $2.85 billion, a 22.3 percent increase from the prior year. Comparable store sales for the period jumped 10.2 percent.
New video game software sales were “outstanding” during the holiday season, according to the company, growing 23.5 percent, while hardware sales, led by Nintendo’s Wii and Microsoft’s Xbox 360 were “robust.” Gift card sales during the nine-week period rose 15 percent compared to holiday 2007.
“As expected, the consumer saw great entertainment value in video games in one of the most challenging holiday shopping seasons ever,” said GameStop CEO Daniel DeMatteo. “In fact, in the midst of a serious recession, our average transaction was higher this year than last. In addition, our proprietary inventory management systems allowed us to maintain a great in-stock position during the busiest season we have ever experienced.”
DeMatteo noted that GameStop’s sales grew “in every worldwide territory in which we operate; a clear indication that the GameStop model works everywhere.”
Wall Street rewarded the retailer's performance by sending GameStop's share price up 13 percent.
There was a cost to the company's success, though. While sales “significantly exceeded” company forecasts, GameStop’s gross margin rates were “lower than anticipated as a result of a higher mix of hardware sales and the success of our value messaging and promotions during the holiday period,” the company said.
The retailer is increasing its fourth quarter 2008 comparable store sales guidance to between 9 and 9.5 percent and raising the low end of its previously announced fourth quarter 2008 diluted earnings per share guidance by $0.02, resulting in a range of $1.31 to $1.34, which represents a 15 percent to 18 percent increase over the fourth quarter of 2007.
Full year diluted earnings per share are now forecast to range from $2.37 to $2.40, an increase of nearly 33 percent over the prior year. Comparable store sales are projected to increase between 12 and 12.5 percent for the full year, with total sales growing between 24 and 25 percent.
GameStop’s full year 2008 financial results will be released in mid-March.
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