GameStop's global sales for nine-week holiday period ended Jan. 4, 2014, were US$3.15B, up 9.3% from a year ago; comparable-store sales climbed 10.2%, with US up 7.1%, international up 17.4%

Cindy Allen

GRAPEVINE, Texas , January 14, 2014 (press release) – GameStop Corp. (NYSE: GME), the world’s largest multichannel video game retailer, today reported sales results for the nine-week holiday period ended January 4, 2014.

Total global sales for the period were $3.15 billion, a 9.3% increase compared to the 2012 holiday sales period. Total comparable store sales increased 10.2%, with U.S. comps of +7.1% and international comps of +17.4%. Comparable store sales were driven by new video game console sales as demonstrated by the 99.8% increase in new hardware sales.

Paul Raines, chief executive officer, stated, “I am pleased to report that the extensive planning by our entire team over the past year to prepare for the new console launches paid off. Our outstanding execution during the holidays resulted in GameStop securing the number one market share position in the U.S. and in most of the countries in which we operate today. GameStop also had the highest software and accessory attach ratio of any retailer for both new consoles. Building off this momentum, we are in an excellent position to drive the global adoption of the next generation of new video game products in 2014.”

During this transitional console period, strong sales of next generation software 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 7.0%, 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.

The Other category sales increased by 4.8%. Within this category, digital receipts were $207.3 million, an increase of 14.9%, and mobile revenues increased 23.8% to $94.8 million and now include GameStop’s new technology brands (Spring Mobile, Simply Mac and Aio Wireless).

GameStop’s global multichannel sales (mobile, web-in-store, pick-up at store, ecommerce) grew 57% compared to the 2012 holiday period as customers utilized multiple ways to purchase video game products. Broken down by type, sales through GameStop’s mobile site increased 47%, web-in-store and pick-up at store sales combined increased by more than 120% and sales on www.gamestop.com increased 37%. During the holiday selling period, total site traffic ranked in the top 20 of all online retailers.

Rob Lloyd, chief financial officer, commented, “Clearly, same store sales were driven by very strong growth in new hardware. 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. Based on these results, GameStop now expects its fourth quarter and full year 2013 same store sales to be at the high end of the current guidance range and fourth quarter earnings per share to be in a range of $1.85 to $1.95 and full year earnings per share to be in a range of $2.96 to $3.06.”

Capital Allocation Update

During the holiday period, GameStop repurchased 800,500 shares of common stock at an average price of $49.39, or $39.5 million worth of stock. As of the end of the holiday period, the company had approximately $467.1 million remaining of its current share repurchase authorization.

About GameStop

GameStop Corp. (NYSE: GME), a Fortune 500 and S&P 500 company headquartered in Grapevine, Texas, is the world's largest multichannel video game retailer. GameStop's retail network and family of brands include 6,488 company-operated stores in 15 countries worldwide and online at www.GameStop.com. The network also includes: www.Kongregate.com, a leading browser-based game site; Game Informer(R) magazine, the leading multi-platform video game publication; Spawn Labs, a streaming technology company; and a digital PC game distribution platform available at www.GameStop.com/PC; and an online consumer electronics trade-in platform available at www.BuyMyTronics.com.

General information on GameStop Corp. can be obtained at the company's corporate website. Follow GameStop on Twitter @ www.twitter.com/GameStop and find GameStop on Facebook @ www.facebook.com/GameStop.

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