Legit Reviews

GRAPEVINE, Texas, May 19, 2011 (BUSINESS WIRE) -- GameStop Corp. (NYSE: GME), the world's largest multichannel video game retailer, today reported record sales and earnings for the first quarter ended April 30, 2011.

Financial Results

Total sales for the first quarter of 2011 increased 9.5% to $2.28 billion, in comparison to $2.08 billion in the prior year quarter. Total company comparable store sales were 5.3%, driven primarily by strong HD console sales, the Nintendo 3DS launch and a 9.5% growth of pre-owned products. Digital sales increased 53% over last year as each digital segment experienced strong growth.

The top five selling games during the quarter were Nintendo's Pokémon Black and White,Mortal Kombat from Warner Home Video Games, Capcom's Marvel vs. Capcom 3: Fate of Two Worlds, Call of Duty: Black Ops from Activisionand THQ's Homefront.

Net earnings increased 6.9% to $80.4 million, as compared to net earnings of $75.2 million in the prior year quarter. Diluted earnings per share increased 16.7% to $0.56, as compared to $0.48 in the prior year quarter.

Paul Raines, chief executive officer, stated, "GameStop continues to execute its strategic plan. Our strong comparable store sales reflect record share gains, pre-owned sales acceleration, robust digital sales growth and extraordinary consumer acceptance of our PowerUp Rewards(TM) loyalty program. Our unique, multichannel business model makes the GameStop network the premier gaming provider."

Rob Lloyd, chief financial officer, said, "We delivered record financial results while continuing to make investments in our digital channel, including the acquisitions of Spawn Labs and Impulse, Inc. The strength of our balance sheet and consistent cash flow allows us to invest in future growth channels while returning value to shareholders."

Earnings Guidance

For the second quarter of fiscal 2011, the company expects comparable store sales to range from -2.0% to flat. Diluted earnings per share are expected to range from $0.20 to $0.23. As expected, the decline in year-over-year earnings stems primarily from the previously announced planned investments GameStop is making in its strategic initiatives, which will be approximately $0.04 per share in the second quarter.

GameStop is reiterating its full year diluted earnings per share guidance range of $2.82 to $2.92, representing a 6.4% to 10.2% increase over fiscal 2010. Full year comparable store sales are still expected to range from 3.5% to 5.5%.

Share Repurchase Update

During the first quarter, GameStop purchased 5.92 million shares at an average price of $19.88, or $117.7 million worth of stock.

Note that earnings guidance only includes the effect of the shares purchased thus far in fiscal 2011 from the $500 million share and debt repurchase plan authorized in February 2011.

Conference Call and Webcast Information

A conference call with GameStop Corp.'s management is scheduled for May 19, 2011 at 10:00 a.m. CT to discuss the first quarter sales and earnings results. The conference call will be simulcast on the Internet at investor.gamestop.com. The conference call will be archived on the website until July 19, 2011.

GameStop is scheduled to present at Citi's 2011 Global Consumer Conference at 10:00 a.m. ET on Tuesday, May 24 at the Westin Times Square Hotel in New York City.

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 6,573 company-operated stores in 17 countries worldwide and online at www.GameStop.com. Our 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 Impulse, Inc., a digital distribution platform available at www.impulsedriven.com.