GameStop's earnings, sales beat forecast

Forecasts fiscal year sales growth of 12%

By Danny King -- Video Business, 2/23/2009

FEB. 23 | GameStop reported that it beat its fiscal fourth-quarter forecast for same-store sales and earnings and predicted sales for the current fiscal year might beat analysts' expectations, reflecting stronger-than-expected holiday sales.

The videogame retailer's fourth-quarter same-store sales rose 9.6%, up from its forecast of about 9.3%, GameStop said in a statement last week. Earnings were about $1.34 a share, compared with its Jan. 8 forecast of between $1.31 and $1.34. The company will report its full earnings next month.

GameSpot predicts that, for the fiscal year ending Jan. 30, 2010, sales will rise as much as 12%. Analysts in a Thomson Reuters survey forecasted a 10.8% increase in revenue.

GameStop's results reflect a videogame industry that has surged as demand for other forms of packaged media, such as DVDs and CD, have fallen. U.S. spending on videogame hardware and software last year rose 17% from 2007 to about $22 billion, the Entertainment Software Association said in a statement last month. Meanwhile, U.S. home entertainment sales fell 5.7% last year to $21.7 billion despite the tripling of spending on Blu-ray discs, according to data compiled by Video Business and Rentrak.

Last month, GameStop said its same-store holiday revenue jumped more than 10% as the combination of new software releases and demand for hardware platforms such as the Nintendo Wii caused videogame sales to defy slumping retail demand during the holidays.

The company's software sales were led by Activision's Call of Duty: World at War, and Nintendo's Wii and Microsoft's Xbox 360 led a surge in sales of consoles.