WASHINGTON (dpa-AFX) - Video game retailer GameStop Corp. (GME) on Monday reported a slight increase in sales for the 2011 holiday period compared to the previous year, while comparable store sales edged down 0.3 percent. The company reiterated its earnings outlook for the fourth quarter and fiscal year 2011, but lowered its comparable store sales forecast for both the periods.
The Grapevine, Texas-based company said that total sales for the nine-week holiday period ended December 31, 2011 were $3.019 billion, a slight increase from sales of $3.018 billion in the 2010 holiday sales period.
Total company comparable store sales for the holiday period decreased 0.3 percent, comprising of 0.3 percent increase in the U.S. offset by a decrease of 1.5 percent internationally. Digital sales, which are included in the Other category, grew 60 percent, led by 'Call of Duty' ELITE subscriptions for downloadable content.
Total company sales of new video game software during the holiday period increased 9.9 percent, driven by strong sell-through of PlayStation 3 and Xbox 360 titles, such as Activision's 'Call of Duty: Modern Warfare 3', Bethesda's 'ElderScrolls V: Skyrim' and Ubisoft's 'Assassin's Creed: Revelations'.
However, new hardware sales for the holiday period declined 19.6 percent, as there were no new console products or low enough price points to stimulate consumer demand as in 2010. The pre-owned category increased 3.5 percent over last year's holiday period and rose 7.0 percent year-to-date.
GameStop noted that trades of mobile devices during the period were 4 percent of total company trade volume.
Paul Raines, chief executive officer of GameStop, said, 'During the holiday, our solid sales performance of new high-def console software was offset by weak Wii software sales and hardware sales due to the lack of new hardware offerings versus the 2010 period. We were pleased with the performance of our buy-sell-trade business, digital offerings and mobile initiatives.'
During the holiday period, GameStop repurchased two million of its shares at an average price of $22.38, or $45.2 million worth of stock. On December 16, 2011, the company also retired the remaining $125 million of its senior notes. The company currently has about $329.8 million remaining of its current share repurchase authorization.
For the fourth quarter, GameStop reiterated its earnings outlook in a range of $1.66 to $1.76 per share, excluding debt retirement costs. On average, seventeen analysts expect earnings of $1.73 per share. Analysts estimates typically exclude special items.
For fiscal year 2011, the company reaffirmed its earnings outlook in a range of $2.82 to $2.92 per share, excluding debt retirement costs. Analysts expect the company to earn $2.88 per share for the year.
Based on the holiday sales results, the company now expects comparable store sales for both, the fourth quarter and fiscal 2011, in a range of -2.0 percent to -1.0 percent. Earlier, the company projected comparable store sales for the fourth quarter to range from flat to a 2.0 percent increase, and for the full year to range from -1 percent to flat.
GME closed Friday's trading at $24.87, down $0.39 on 3.78 million shares.
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