New software helps GameStop to modest rise in profits
Retailer sees sales of $1.9bn, profits at $58 million in Q3
US retail giant GameStop has reported net profit of $54.7 million for the third quarter, up 4.8 per cent compared to $52.2 million for the same period last year.
The top five best-selling games for the period were Halo: Reach, Madden NFL 2011, Fallout: New Vegas, NBA 2K11 and Medal of Honor, helping to push sales up 3.5 per cent to $1.9 billion. New software in particular was up 9 per cent over the same quarter last year.
"Our global retail team increased revenues, expanded gross margins and maintained tight expense control which led to solid earnings growth," commented Paul Raines, CEO of GameStop.
"Based on brisk sales trends of new software titles and motion controller launches, we are enthusiastic about our business and have raised our full year earnings guidance."
The company has raised full-year diluted earnings per share from $2.58-$2.86 to 2.63-$2.69, which if met would be an increase on 2009 of between 19 and 23 per cent.
In July GameStop bought Kongregate, part of a wider initiative to expand its business beyond traditional retail.
"Several technology and consumer initiatives have entered the market, each of them strengthening our core business and establishing GameStop as the retail leader in providing consumers with exciting ways to experience videogaming," added Dan DeMatteo, executive chairman.
"The PowerUp Rewards Loyalty Program, Kongregate.com, in-store digital content sales and a re-tooled gamestop.com were all implemented to expand market share and increase our share of wallet.
"Lastly, the on-going execution of share buybacks and debt retirement reinforces our commitment to exercise disciplined capital allocation practices to maximise shareholder returns."
Sales of new game software were up from $769.4 million to $839.1 million, with used product sales up from $507.7 million to $528 million.
New hardware sales were down from $321.4 million to $276 million.