New Consoles Drive GameStop Winter Holiday Sales Surge14 Jan, 2014 By: Erik Gruenwedel
New video games sales disappoint
GameStop Jan. 14 said global sales increased more than 9% to $3.15 billion, compared to the 2012 holiday sales period. Total comparable store sales increased 10%, with U.S. same-store sales up 7% and international comps up more than 17% during the nine-week holiday period ended Jan. 4.
Grapevine, Texas-based GameStop, which operates 6,488 company-operated stores in 15 countries worldwide and online, said the sales uptick was driven by new video game console sales as demonstrated by the 99.8% increase in new hardware sales.
Strong sales of next-generation PlayStation and Xbox units were offset by a greater-than-expected decline in Xbox 360 and PS3 software sales, resulting in a 22.5% decline in the new-software category. The pre-owned category increased 7%, driven by a stronger in-stock position and by the sale of value-priced previous generation consoles.
Gross margins for the pre-owned category are expected to range from 46% to 49% for the fourth quarter and the fiscal year.
Digital receipts topped $207 million, an increase of 14.9%, and mobile revenue increased 23.8% to $94.8 million and now includes GameStop’s new technology brands (Spring Mobile, Simply Mac and Aio Wireless).
“Clearly, same store sales were driven by very strong growth in new hardware,” CFO Rob Lloyd said in a statement. “The higher percentage of sales in the hardware category resulted in better than expected comps, but lower gross margin dollars during the holiday selling period. In addition, new software sales came in below our expectations.”