New video game sales give GameStop slight boost
GRAPEVINE, Texas — GameStop reported that total sales for the nine-week holiday period ended Dec. 31 were $3.03 billion, up slightly from 2010, thanks to strong sales in new video game software.
The company reported that total sales of new video game software increased 9.9%, driven by strong sell-through of such titles as "Call of Duty: Modern Warfare 3" and "Assassin's Creed: Revelations." Sales were offset by poor performance in new hardware sales, which declined 19.6% as there were no new console products or low enough price points to stimulate consumer demand as in 2010, the company said.
GameStop reported that comparable-store sales decreased 0.3%, composed of an increase of 0.3% in the United States offset by a decrease of 1.5% internationally. Digital sales grew 60%, led by "Call of Duty" Elite subscriptions for downloadable content.
GameStop said it is continuing to see strength in its pre-owned category, which increased 3.5% over last year’s holiday period and 7% year-to-date.
Paul Raines, chief executive officer, commented, "During the holiday, our solid sales performance of new high-def console software was offset by weak Wii software sales and hardware sales due to the lack of new hardware offerings versus the 2010 period. We were pleased with the performance of our buy-sell-trade business, digital offerings and mobile initiatives. GameStop also retired the remainder of its long-term debt establishing a debt-free balance sheet as we go into 2012."
GameStop has lowered its fourth-quarter and full-year comps guidance. The company now expects comparable store sales for both the fourth quarter and the full year to range from -2% to -1%. GameStop is reiterating its previously announced fourth quarter and full year earnings per share guidance ranges of $1.66 to $1.76 and $2.82 to $2.92, respectively, excluding debt retirement costs.