United States based consumer retailer, GameStop, announced record earnings for the second quarter of 2008. Things are looking excellent for this consumer retail chain that primarily sells console (XBOX, XBOX360, PS2, PS3, Nintendo Wii), handhelds (Nintendo DS, PSP) and games for both.
Net earnings were up 162.1% to $57.2 million, and for the three months ending August 2nd, sales increased by 34.8% to $1.80 billion (Q2 2007 sales were $963.3 million). Same store sales were up 20% percent and new software sales were up 43%.GameStop, which recently bought Electronics Boutique, operates 5,557 retail stores in 16 countries worlwide.
GameStop expects comparable store sales for the fiscal year ending March 2009 to grow between 12% and 14%, with total company sales up 23 to 25 percent. (Source: Gamasutra).
The top 5 selling games during the period were:
- Grand Theft Auto IV
- Metal Gear Solid 4
- NCAA Football 09
- Wii Fit
- Battlefield: Bad Company
Gamestop expects the following titles to continue their sales bonanza:
- Guitar Hero: World Tour
- Call of Duty: World at War
- Lego Batman
- LittleBigPlane
- Spore
- Fable II
- Rock Band 2
- Gears of War 2
In the Q2 2008 Gamestop Corp. Earnings Conference Call (if you are REALLY interested, click here and listen), GameStop noted that price drops for the PS3 and Xbox 360 resulted in double the unit sales for each console. They noted that the Nintendo Wii continues to sell out and they expect the Wii will remain in short supply for the rest of the year. Anyone hoping to give a Nintendo Wii for Christmas this year should start shopping now!
GameStop chairman and CEO, R. Richard Fontaine, posited:
"By prioritizing our investments and focusing our resources, GameStop continues to significantly outperform the specialty retail segment as a whole, when comparing top-line growth, comparable store sales, and net earnings growth,"
But GameStop is not the only source of this bullish projection. Janco Partners' Mike Hickey also forecasts continued growth for GameStop:
"Accelerating demand for next-gen hardware including the PlayStation 3 should benefit comparable store sales in the [present] period," Hickey said of the company, who added it is not just demand, but broad demand which is fueling GameStop growth.
Success for GameStop is "highly attributable to video game play attracting a mainstream audience," with the demographic expansion having much to do with "new consoles like the Wii, which pull back on the geekish complexity of typical content aimed at hardcore gamers."
(Source: CNN.com)
Strangely missing from GameStop's future titles is World of Warcrat's upcoming expansion Wrath of the Lich King. According to Hickey, WoW's last expansion, The Burning Crusade, sold 2.4 million copies in 24 hours and 3.5 million copies in the first month. Hickey predicts GameStop's stock price will top $70 in the next year.