GameStop Revenue for Q2 FY13 Down by Nearly 11 Percent

August 22, 2013 - GamePolitics Staff

Video games retailer GameStop announced financial results for the second quarter of 2013, beating analyst expectations on earnings per share, but posting a loss nonetheless. Total global sales for the second quarter of 2013 were $1.38 billion, compared to $1.55 billion in the same period a year ago - a 10.7 percent decrease. Consolidated comparable store sales also decreased 10.7 percent, slightly better than the guidance provided by the company on May 23.

During the quarter, mobile sales grew 121.4 percent to $55.1 million, and digital sales grew 17.9 percent to $158.0 million. Sales of new software fell by 9.3 percent, while new hardware sales declined 19.4 percent, and pre-owned sales decreased 6.0 percent. This, says GameStop, is due to consumers preparing for the launch of the PS4 and Xbox One this fall...

GameStop’s net earnings for the second quarter were $10.5 million compared to net earnings of $21.0 million in the same period a year ago. Diluted earnings per share were $0.09, exceeding the high end of the company’s guidance by $0.02. GameStop said that "expense control and gross margin improvement were the primary drivers of the better-than-expected results."

During the second quarter of 2013, GameStop repurchased approximately 2.39 million shares at an average price of $37.21, or $88.9 million worth of stock. There is now approximately $311 million remaining on the existing repurchase authorization. GameStop’s board of directors also declared a quarterly cash dividend of $0.275 per common share payable on Sept. 19, 2013 to shareholders of record at the close of business on Sept. 3, 2013.

Looking ahead to the third quarter of fiscal 2013, GameStop expects comparable store sales to range from +11.0% to +15.0%. Diluted earnings per share are expected to range from $0.50 to $0.55. The company also raised the full year diluted earnings per share guidance range of $2.90 to $3.15 to $3.00 to $3.20. Full year comparable store sales are expected to range from -3.5% to +1.5%.

BMO Capital Markets analyst Edward S. Williams has rated the company as "Outperform," and offered the following comments in a research note last night:

"GameStop continues to execute well in a difficult environment. The company is gaining share– and expanding into higher-margin revenue streams (mobile sales, tablets, and device trade-ins). The company also is aggressively returning capital to shareholders through stock buybacks and dividends. In the short term, we expect GameStop to benefit from several key product launches - including SW titles in the October quarter and new game systems in the January quarter. However, we see several significant challenges on the horizon – the rise of digitally distributed content, changing playing patterns, and increased pressure on used products. While it may take time for these challenges to manifest themselves in GameStop’s P&L, we expect these currents to keep some potential shareholders at bay."



Re: GameStop Revenue for Q2 FY13 Down by Nearly 11 Percent

When Gamestop took over EB Games they decided to stop carrying PC game (other than a tiny handful) and that drove me away and into the arms of Steam (also GOG). There is no way Gamestop can compete with Steam so I don't see any way they could change to appeal to me again, all the added infamy just reinforces that. 

Re: GameStop Revenue for Q2 FY13 Down by Nearly 11 Percent

GameStop's customer base is an exclusive group of consumers. Problem is their buisness practices have caused them to gain great infamy from gamers and it doesn't help now businesses and customers are embracing digital content. To survive GameStop needs to

  • Stop pushing magazine subs
  • Selling Used Games as new
  • Stop taking out discs and breaking the seal for games.
  • Stop employee borrowing of games to where they bring them back and again sell a used product as new.

Re: GameStop Revenue for Q2 FY13 Down by Nearly 11 Percent

Whoever fixed my post thanks I am posting on an iPhone.

Re: GameStop Revenue for Q2 FY13 Down by Nearly 11 Percent

You're welcome!


Andrew Eisen

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