GameStop Narrows Q3 Profit21 Nov, 2014 By: Erik Gruenwedel
GameStop reported a 18% decline in third-quarter (ended Nov. 1) profit to $56.4 million on revenue of $2.09 billion, which was down $14.5 million compared with the previous-year period.
The largest retailer of video games in the country attributed the decline to the sale and shutdown of certain business operations. GameStop recorded non-recurring charges of $13.9 million due to the downsizing, which included exiting the video game retail market in Spain.
Same-store sales dipped 2.3% due to the delayed release of Assassin’s Creed: Unity.
During the quarter, new hardware sales increased 147.4%, outpacing industry growth of 102.4%. After 12 months since launch, the U.S. installed base of the Sony PlayStation 4 and Microsoft Xbox One is 73% greater than the PlayStation 3 and Xbox 360 base was over the same period.
GameStop reached 47.3% new software market share during the quarter, its second highest ever, despite new software sales declining 34.4%. The decrease was primarily due to overlapping the company’s record market share of last year’s titles, such as Grand Theft Auto V, Battlefield 4, Batman: Arkham Origins, Pokemon X/Y and Assassin’s Creed IV: Black Flag.
The pre-owned category recorded its third straight quarter of positive growth (up 2.6%) — underscoring the value in pre-owned video game consoles.
“As we look at the holiday quarter, we are focused on applying our competitive advantages: convenience, strong CRM, knowledgeable associates and value through our unique forms of currency, which include buy-sell-trade and the new PowerUp Rewards credit card, to deliver a successful [Q4] quarter,” CEO Paul Raines said in a statement.