GameStop's holiday sales flat as store comps slide
By Staff -- Gifts and Dec, 1/8/2010 9:17:00 AM
GRAPEVINE, Texas—Stung by slumping same-store numbers, video game retailer GameStop Corp. tallied flat holiday sales for the nine-week period ended on Jan. 2, 2010.
Total sales for the period were $2.86 billion, essentially unchanged from the corresponding period of 2008. Comparable store sales for the frame decreased 8.6 percent.
“Despite a kick start to this year’s holiday selling season with several major title launches, sales momentum was impacted in December by economic weakness in all global operating segments, winter storms at peak shopping periods in December, and unexpected shortages of key products such as New Super Mario Bros. Wii, Nintendo Wii and Sony’s PlayStation 3 consoles,” said Daniel DeMatteo, the retailer’s CEO.
Hardware sales declined 8 percent due to console price cuts and a decline in unit sales on a year-over-year basis. There was good news on the content side, though: New video game software sales increased 4 percent in the holiday period. The top five video games sold during the period were Call of Duty: Modern Warfare 2 from Activision, Ubisoft’s Assassin’s Creed II, Nintendo’s New Super Mario Bros. Wii, Left 4 Dead 2 and Dragon Age: Origins from Electronic Arts. Used video game product sales grew 10 percent, which was less than forecast.
Based on the results, GameStop lowered its fourth quarter 2009 guidance. The retailer now expects fourth quarter 2009 diluted earnings per share guidance to range from $1.25 to $1.29. Comparable store sales in the quarter are now expected to be down in the range of 8.5 percent to 9.5 percent.
Full year diluted earnings per share are forecast to range from $2.23 to $2.27. Comparable store sales are projected to decrease between 8 percent and 9 percent for the full year, with total sales growing between 2 percent and 3 percent.
Cathy Smith, Chief Financial Officer, added: “It is important to note that this is still the second highest earnings year in GameStop’s history coming off a record fiscal year 2008. Our fiscal year 2009 projected EPS represents a 25 percent growth over fiscal year 2007.”
The company expects its 2010 to be helped by “strong PlayStation 3 demand, an exciting title line-up, combined with an anticipated economic recovery.”
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