Leading market share of Xbox One & PlayStation 4 consoles drives comps of 10.2%
Global multichannel sales grew 56.7% compared to 2012 holiday period
Company repurchases $39.5 million of stock during holiday period
GRAPEVINE, Texas--(BUSINESS WIRE)--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.
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.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, the outlook for the fourth quarter and fiscal 2013, future financial and operating results, projected store openings, the company's plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of GameStop's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. GameStop undertakes no obligation to publicly update or revise any forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the inability to obtain sufficient quantities of product to meet consumer demand, including console hardware and accessories; the timing of release of video game titles for consoles; consumer demand for next generation consoles; the cyclical nature of the video game industry; the risks associated with expanded international operations and the integration of acquisitions; failure to achieve anticipated benefits from new ventures and transactions; the impact of increased competition and changing technology in the video game industry, including browser and mobile games and alternative methods of distribution; and economic, regulatory and other events, including litigation, that could reduce or impact consumer demand or affect the company’s business. Additional factors that could cause GameStop's results to differ materially from those described in the forward-looking statements can be found in GameStop's Annual Report on Form 10-K for the fiscal year ended Feb. 2, 2013 filed with the SEC and available at the SEC's Internet site at http://www.sec.gov or http://investor.GameStop.com.
|9 Weeks Ended||9 Weeks Ended|
|Jan. 4, 2014||Dec. 29, 2012|
|Sales||of Total||Sales||of Total|
|Sales (in millions):|
|New video game hardware||$||1,048.2||33.3||%||$||524.5||18.2||%|
|New video game software||1,080.4||34.3||%||1,393.9||48.4||%|
|Pre-owned video game products||567.3||18.0||%||530.0||18.4||%|
VP, Public & Investor Relations