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Retail

GameStop reports record high sales for 2010

Thu 24 Mar 2011 1:40pm GMT / 9:40am EDT / 6:40am PDT
RetailFinance

Retailer notes 4.3% increase to $9.47 billion as profit jumps to $408 million

US-based specialist retailer GameStop has announced its financial results for the year ending January 29, 2011, with record high sales of $9.47 billion and profits hitting $408 million.

Those numbers represented increases of 4.3 per cent and 8.1 per cent respectively, with console and PC digital sales demonstrating 61 per cent growth to account for $290 million.

Diluted EPS grew by 17.8 per cent to $2.65, up from $2.25 the previous year.

"In 2010, our innovations in e-commerce, digital offerings and PowerUp Rewards helped drive record sales, earnings and market share," commented Pail Raines, CEO. "Our focus in 2011 is to build on the success of our PowerUp Rewards program, expand our used business and increase our digital revenues, all while delivering strong financial results."

And Rob Lloyd, CFO, added: "In 2010, GameStop generated more than $590 million of operating cash flow. We returned more than $380 million to shareholders through stock repurchases, reduced debt by $200 million as well as funded our new initiatives, digital acquisitions and global expansion. Overall, we begin 2011 in a position of financial strength and remain on track to meet our long-term return on invested capital goal."

Sales of new hardware accounted for $1.7 billion, slightly lower as a proportion of overall sales than the previous year, while new software increased its footfall slightly to 41.9 per cent of the total with $3.97 billion.

Used game sales increased by $75 million over the previous year, but accounted for a lower percentage of total sales, coming in at $2.47 billion - while still a big chunk of the company's overall revenues, that increase was only a quarter of the rise in digital sales, a result that publishers will be interested to note.

"We believe this is a notable achievement as the company seeks to diversify its revenue base and take share online as a digital aggregator," said Lazard Capital's Colin Sebastian of those digital sales.

"Even assuming slower growth in digital going forward, digital should represent a half billion-plus revenue opportunity for GameStop within the next two years," he added.

Following the release of the results, shares in GameStop were up by over 4 per cent, to sit at $22.02 at the time of publication.

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