sonycowboy
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August 17, 2004 08:30 AM US Eastern Timezone
GameStop Corp. Sales Up 13 Percent; Video Game Software Sales Increase 17 Percent;
Second Quarter EPS Grows 18% to $0.13 at High End of Projected Range
GRAPEVINE, Texas--(BUSINESS WIRE)--Aug. 17, 2004--GameStop Corp. (NYSE:GME), the nation's largest video game and entertainment software specialty retailer, today reported sales and earnings for the second quarter ended July 31, 2004.
GameStop sales increased 13% to $345.6 million in the second quarter of 2004, compared with $305.7 million in the prior year quarter. Video game software sales were strong, growing 17%, with leading titles such as "NCAA Football 2005" from Electronic Arts, Inc., "Spider-Man 2" from Activision, Inc., and "ESPN NFL 2K5" from Sega of America and Take-Two Interactive, Inc. Comparable store sales declined by 2.4%, in line with expectations.
Net earnings for the second quarter increased to $7.7 million, compared with net earnings of $6.6 million in the prior year quarter. Diluted earnings per share increased 18%, to $0.13 per diluted share, as compared to $0.11 per diluted share in the prior year quarter.
New store sales performance exceeded our expectations, and we opened 77 stores during the quarter, bringing the total number of new stores opened so far this year to 180.
"We are pleased with our second quarter results, and are particularly happy about our earnings being at the high end of our projected range. In addition, as NPD data indicates, GameStop again continued to gain market share," said R. Richard Fontaine, Chairman and Chief Executive Officer. "We experienced strong hardware sales at the beginning of the second quarter due to price cuts on the Microsoft Xbox and Sony PlayStation 2 systems, and our in-store promotional activities; however, unanticipated hardware shortages in late June and July on the PlayStation 2, and to a lesser extent, Xbox, impacted the momentum that we had built earlier in the quarter. We are also very pleased with our continued margin growth and our overall software sales increase of 17%, particularly as we were up against very challenging software comparisons in the prior year's quarter."
Fontaine continued, "We believe we are well positioned to fully maximize the potential of the release of several very strong titles for the third and fourth quarters, which perhaps could be the most robust software line-up in the last five years."
During the second quarter, GameStop completed its previously announced $50.0 million stock buy-back program, acquiring approximately 959,000 shares for $15.0 million at an average price of $15.64 per share.
Guidance for the third quarter assumes comparable store sales will range from +4.0% to +6.0%, with earnings per diluted share between $0.20 and $0.21. We continue to believe that full-year 2004 earnings per diluted share will range from $1.20 to $1.24.
A conference call with GameStop Corp.'s management will be simulcast on the Web at (http://www.gamestop.com) beginning at 11:00 AM ET on August 17, 2004, and will be accessible at (http://www.gamestop.com/investor-relations), where it will be archived until September 1, 2004.
GameStop Corp. Sales Up 13 Percent; Video Game Software Sales Increase 17 Percent;
Second Quarter EPS Grows 18% to $0.13 at High End of Projected Range
GRAPEVINE, Texas--(BUSINESS WIRE)--Aug. 17, 2004--GameStop Corp. (NYSE:GME), the nation's largest video game and entertainment software specialty retailer, today reported sales and earnings for the second quarter ended July 31, 2004.
GameStop sales increased 13% to $345.6 million in the second quarter of 2004, compared with $305.7 million in the prior year quarter. Video game software sales were strong, growing 17%, with leading titles such as "NCAA Football 2005" from Electronic Arts, Inc., "Spider-Man 2" from Activision, Inc., and "ESPN NFL 2K5" from Sega of America and Take-Two Interactive, Inc. Comparable store sales declined by 2.4%, in line with expectations.
Net earnings for the second quarter increased to $7.7 million, compared with net earnings of $6.6 million in the prior year quarter. Diluted earnings per share increased 18%, to $0.13 per diluted share, as compared to $0.11 per diluted share in the prior year quarter.
New store sales performance exceeded our expectations, and we opened 77 stores during the quarter, bringing the total number of new stores opened so far this year to 180.
"We are pleased with our second quarter results, and are particularly happy about our earnings being at the high end of our projected range. In addition, as NPD data indicates, GameStop again continued to gain market share," said R. Richard Fontaine, Chairman and Chief Executive Officer. "We experienced strong hardware sales at the beginning of the second quarter due to price cuts on the Microsoft Xbox and Sony PlayStation 2 systems, and our in-store promotional activities; however, unanticipated hardware shortages in late June and July on the PlayStation 2, and to a lesser extent, Xbox, impacted the momentum that we had built earlier in the quarter. We are also very pleased with our continued margin growth and our overall software sales increase of 17%, particularly as we were up against very challenging software comparisons in the prior year's quarter."
Fontaine continued, "We believe we are well positioned to fully maximize the potential of the release of several very strong titles for the third and fourth quarters, which perhaps could be the most robust software line-up in the last five years."
During the second quarter, GameStop completed its previously announced $50.0 million stock buy-back program, acquiring approximately 959,000 shares for $15.0 million at an average price of $15.64 per share.
Guidance for the third quarter assumes comparable store sales will range from +4.0% to +6.0%, with earnings per diluted share between $0.20 and $0.21. We continue to believe that full-year 2004 earnings per diluted share will range from $1.20 to $1.24.
A conference call with GameStop Corp.'s management will be simulcast on the Web at (http://www.gamestop.com) beginning at 11:00 AM ET on August 17, 2004, and will be accessible at (http://www.gamestop.com/investor-relations), where it will be archived until September 1, 2004.
