(RTTNews) - Thursday morning, video game and entertainment software retailer GameStop Corp. (GME | news | PowerRating | PR Charts ) said that its holiday sales for the nine-week period ended January 5, 2008 surged 34.7% from the year-ago period, reflecting a 20.0% rise in comparable store sales. Buoyed by the results, GameStop lifted its earnings and comparable store sales outlook for the fourth quarter as well as fiscal year 2007.
The Grapevine, Texas-based GameStop's holiday sales for the nine weeks ending January 5, 2008 increased to $2.33 billion from $1.73 billion in the comparable period of the prior-year, aided by a 45% growth in video game software sales.
Richard Fontaine, Chairman and Chief Executive Officer of GameStop said, "Driven by robust domestic and international sales, GameStop achieved the most successful holiday season results ever. Video game software sales grew by 45%, while the next generation installed base is now triple last year's base and a very positive leading indicator for future sales growth."
The company disclosed that the top five video games sold during the recent holiday period were Activision's "Guitar Hero III" and "Call of Duty 4: Modern Warfare", Ubisoft's "Assassin's Creed", Electronic Art's "Rock Band" and Nintendo's "Super Mario Galaxy."
GameStop also noted that sales of the Nintendo Wii, despite the on-going seasonal shortages, in addition to sales of Microsoft's Xbox 360 and Sony's PlayStation 3 were strong.
Buoyed by the sales trends to date, GameStop lifted its fourth quarter earnings outlook to a range of $1.09-$1.10 per share from the prior range of $0.95-$0.97 per share. On average, sixteen analysts polled by First Call/Thomson Financial expect the company to report earnings of $1.01 per share for the quarter.
GameStop also raised its comparable store sales growth forecast for the fourth quarter to a range of 15.5-16.5% from the prior range of 7-9%.
In addition, the company increased its earnings outlook for fiscal year 2007 to a range of $1.75-$1.76 per share from the prior range of $1.61-$1.63 per share. Wall Street analysts expect the company to report earnings of $1.66 per share for the year.
GameStop also lifted its comparable store sales growth forecast for the year to a range of 23.5-24.5% from the prior range of 20-21%.
Last month, GameStop announced an exclusive, one-day reservation program for customers who wished to purchase the highly sought-after Nintendo Wii in the holiday season. The company had said that although many store locations would have the Nintendo Wii in stock for immediate purchase during the holiday season, it initiated the exclusive reservation program since quantities were limited.
In November last year, the company reported a surge in earnings for the third quarter from a year ago, helped by momentum in the video game business. Net earnings for the quarter was $52.0 million or $0.31 per share compared to $13.57 million or $0.09 per share in the prior-year period. Comparable store sales for the quarter rose 46.3%. Total sales grew by 59.3% to $1.61 billion from $1.01 billion in the comparable period last year.
Among GameStop's peers, Seattle, Washington-based Amazon Inc. (AMZN | news | PowerRating | PR Charts ) announced last month that the 2007 holiday season was its strongest ever, facilitated by robust sales of Nintendo Wii systems. Specifically, Amazon.com said it sold Nintendo Wii systems at about 17 per second when they were in stock. For the period from November 15 through December 19, 2007, the company said that its top sellers included, Nintendo Wii, video games such as "Super Mario Galaxy" and "Call of Duty 4" and DVDs including "Harry Potter and the Order of the Phoenix," "Planet Earth: The Complete BBC Series" and "Pirates of the Caribbean: At World's End". Amazon.com also said that December 10, 2007 was the company's busiest day, with orders totaling more than 5.4 million items, equivalent to sale of approximately 62.5 items per second.
In Thursday's regular trading session, GME is trading at $51.78, down $3.33 or 6.04% on a volume of 2.35 million shares. In the 52-week period, the stock has been trading in a range of $24.95-$63.77.
