GameStop’s same-store sales fall
PHYSICAL: Retailer cites slow April, record prior year
By Danny King -- Video Business, 5/21/2009
MAY 21 | PHYSICAL: GameStop’s fiscal first-quarter same-store sales fell on lower videogame console sales in April and record-breaking year-earlier sales of such games as Take-Two Interactive’s Grand Theft Auto IV, the largest U.S. videogames retailer said today. Shares fell this morning after the company forecast further same-store sales declines for the current quarter. However, GameStop profit rose 13% from a year earlier.
Revenue for stores open at least a year decreased 1.5%, compared to the company’s growth forecast of between 0% and 2%, GameStop said in a statement today. Total sales for the quarter ended May 2 rose 9.2% to $1.98 billion, though lagged the $1.99 billion estimated by analysts in a Thomson Reuters poll.
GameStop’s results, which were largely affected by a drop in European demand, reflected an industrywide decline in sales of videogame hardware and software, largely caused by a lack of new titles last month. This year’s industry sales through April fell 4% from a year earlier to $5.28 billion, while April sales alone dropped 17%, NPD Group said last week.
GameStop also forecast the current quarter’s same-store sales to fall between 8% and 11% as a rise in handheld devices such as Nintendo’s DSI will be offset by further declines on console demand, GameStop chief financial officer David Carlson said on a conference call today.
“The back half of the year is forecasted to be better than the first half,” GameStop CEO Daniel DeMatteo said on today’s call. “Hopefully the economic environment will improve later in the year, and we will be well positioned to capitalize.”
Overall, net income rose 13% to $70.4 million, or 42¢ a share, from $62.1 million, or 37¢, a year earlier, as revenue increased 9.2% to $1.98 billion, GameStop said. The company, which had forecast earnings of between 40¢ and 42¢, was expected to earn 42¢ by analysts.
Though new-game sales fell 3% from a year earlier, used-game sales jumped 32% despite Amazon.com’s entry into used games earlier this year. DeMatteo said he has seen “no impact” of new entrants in the used-games market.
GameStop shares fell about 15% as of about 11:30 a.m. Eastern time today.
