Sales, Profit Down for GameStop18 Aug, 2011 By: Chris Tribbey
Results underscore burgeoning issues for video game market as high-priced theme games and sluggish hardware sales confront ongoing economic challenges
Gaming retailer GameStop announced second-quarter (ended July 30) profit of $30.9 million Aug. 18, down sharply from $40.3 million during the same quarter in 2010.
Total sales for the quarter were $1.74 billion, down 3.1% from the $1.8 billion the company posted in the prior year quarter. Comparable store sales were down more than 9%.
“GameStop’s resilient retail model enabled us to achieve our earnings plan despite a challenging period for the industry,” said company CEO Paul Raines. “Through the back half of the year, we expect industry software sales to accelerate based on an exciting title line-up. Meanwhile, the digital and loyalty programs we have brought to market continue to gain traction with consumers and position us as a leading partner with publishers.”
Digital revenues were up nearly 70%, and sales of pre-owned games were up 12%.
“Continued strength in pre-owned sales, improved gross margins, tight cost controls and capturing a high rate of sales transfers all contributed to our financial results,” said Rob Lloyd, chief financial officer for the company.
For the year, GameStop is promising earnings per share between $2.82 and $2.92.