GameStop's Sales Soar to Nearly $7.1 Billion in 2007

GameStop continues to feast on the growing video game industry. Q4 sales driven by the likes of Call of Duty 4 and Rock Band helped full year earnings rise 82 percent.

Leading video game retailer GameStop released its fourth quarter and full year fiscal results for the period ended February 2, 2008, and as expected it was all very positive. For Q4, net earnings rose over 46 percent to $189.8 million as sales rose 24.4 percent to $2.87 billion. Comparable store sales increased 17.4 percent and sales of new game software also grew over 38 percent. GameStop said the top five selling titles for the quarter were Call of Duty 4: Modern Warfare, Rock Band, Assassin's Creed, Super Mario Galaxy and Guitar Hero III.

For the full year, GameStop generated even more impressive results as a whole. The company posted $7.09 billion in sales (a 33 percent increase) and net earnings jumped over 82 percent to $288.3 million. In addition, the retailer's comparable store sales rose 24.7 percent and the company saw a 50 percent increase in operating earnings. Continuing its expansion, GameStop said it opened 586 new stores during the last fiscal year.

"Our performance in 2007 was impressive from many perspectives. But what is particularly noteworthy is that 2007 was a transformative year with hardware sales setting records and the installed base of users reaching an all-time high. Likewise, the expanding demographic profile of the video game player has moved this business into the mainstream of entertainment. This will be compounded by a strong 2008 video game title lineup and the value aspect of GameStop's used model that appeals to a broad base of budget conscious consumers," said R. Richard Fontaine, Chairman and Chief Executive Officer of GameStop.

He continued, "Prospects for the 575-600 new store openings in 2008 look very promising even with the current concerns about the U.S. economy. As one of the few American retailers actively seeking many new sites, GameStop is positioned to secure better locations with more advantageous lease terms and is more frequently being viewed as a critical brand to anchor strip centers."

GameStop also provided guidance for the current quarter, the current 2008 fiscal year ending January 31, 2009 and some outlook for fiscal 2009. Concerning the first quarter of fiscal 2008, GameStop expects comparable store sales to be up 24-25 percent, driven by console and handheld hardware demand and top releases such as Super Smash Bros. Brawl, Devil May Cry 4 and GTA IV. Earnings per share are expected to more than double from fiscal 2007's $0.15 to a range of $0.32-$0.33.

For the full 2008 fiscal year, the company expects sales to grow 19-21 percent, with comparable store sales up 10-12 percent. Earnings per share are anticipated to range from $2.25 to $2.34, which would be an increase of 25-30 percent over fiscal 2007. Looking even further ahead, GameStop said it expects earnings per share to grow at least 25 percent in fiscal 2009 "based on several key factors, including: the company's growing worldwide retail footprint, the company's ongoing cash generation, the continued expansion of the video game industry, and the broadening consumer base."
via gamedaily

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