GameStop Reports Record Sales, Earnings24 Mar, 2011 By: Chris Tribbey
GameStop’s digital sales for consoles and the PC were up 61% in 2010 to $290 million, and overall sales increased 4.3% to a record $9.47 billion, the retailer said March 24.
GameStop had nothing but rosy news for investors in reporting its fourth-quarter (ended Jan. 29) and full-year 2010 earnings. Fourth-quarter sales were $3.69 billion, up 4.8% from $3.52 billion during the same quarter in 2009. Comparable store sales were up 2.6% and quarterly profit stood at $237.8 million, up 10.1% from $215.9 million. Earnings per share for the quarter were up 20.9% to $1.56.
“In 2010, our innovations in e-commerce, digital offerings and PowerUp Rewards helped drive record sales, earnings and market share,” said CEO Paul Raines. “Our focus in 2011 is to build on the success of our PowerUp Rewards program, expand our used business and increase our digital revenues.”
For the year, comparable store sales were up 1.1% and 2010 profit stood at $408 million, up 8.1% year over year. Annual earnings per share were up 17.8% to $2.65.
“In 2010, GameStop generated more than $590 million of operating cash flow,” said CFO Rob Lloyd. “We returned more than $380 million to shareholders through stock repurchases, reduced debt by $200 million as well as funded our new initiatives, digital acquisitions and global expansion. Overall, we begin 2011 in a position of financial strength and remain on track to meet our long-term return on invested capital goal.”
During the fourth quarter GameStop purchased 5.4 million shares.
For 2011 GameStop is forecasting a 6% to 8% increase in sales and earnings per share between $2.82 and $2.92.
The company plans to invest another $100 million in digital initiatives.