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GameStop reports $62.1 million net earnings for Q1

Videogame retailer GameStop has reported a record $62.1 million in net earnings and $1.8 billion in sales for Q1

GameStop, the world's largest videogame retailer, reported USD 1.8 billion in sales and USD 62.1 million in net earnings for the first quarter ended May 3, 2008.

Net earnings were up 151.4 per cent from the same period of the prior year. Diluted earnings per share were USD 0.37 - beating the high-end of guidance by USD 0.05 per share.

Sales were up 41.8 per cent from Q1 2007, with comparable store sales increasing 27.1 per cent during the first quarter. According to the company, new videogame software sales grew 72 per cent led by Grand Theft Auto IV, Super Smash Bros Brawl, Mario Kart Wii, Rainbow Six: Vegas 2 and Army of Two.

"We are very bullish on the future as three major metrics are transforming the business and accelerating the potential for GameStop growth," said Chairman and CEO R Richard Fontaine.

"The installed base of video game consoles grew 34 per cent in 2007, or nearly 31 million units - the highest incremental growth in the history of the business - and we are forecasting that hardware unit sell-thru will match these levels in 2008.

"And behind the huge hardware growth is the fact that the demographic for videogaming is expanding dramatically as industry figures indicate that 38 per cent of game players are female."

Fontaine also referred to an outstanding line-up of games coming during the rest of the year such as Wii Fit, Metal Gear Solid 4, Gears of War 2 and Guitar Hero 4.

For Q2 2008, GameStop is forecasting comparable store sales to range from +12 - +14 per cent. The company is also increasing its guidance for full year diluted EPS to a range of USD 2.30 - 2.39 based upon stronger than expected Q1 earnings.

GameStop opened 210 stores during the first quarter, with a goal of opening 550-600 new stores in 2008 - over half outside of the US. It currently operates over 5,400 stores worldwide.

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