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GameStop Sales Up 42% In Record $1.8 Billion Q1
by Brandon Boyer
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May 22, 2008
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GameStop's string of record quarterly results has continued in its first quarter, with GTA IV, Smash Bros. and Mario Kart pushing sales up 42 percent to $1.8 billion, and profits up 151 percent to $62.1 million.
GameStop reported that new game software sales were up an "amazing" 72 percent, with comparable store sales up 27.1 percent in the first quarter. New game hardware made up 18.7 percent of sales at $339 million, new game software making up 43.7 percent at $792.8 million, and used games making up 22.9 percent at $415.7 million.
Five days of GTA IV sales, Nintendo's Super Smash Bros. Brawl and Mario Kart for Wii, Ubisoft's Rainbow Six: Vegas 2 and EA's Army of Two were reported as the retailer's top quarterly sellers.
CEO R. Richard Fontaine said in a release that 210 stores were opened during the first quarter, moving the company closer to its goal of opening 550 and 600 new stores in 2008. "With half of the new stores opening outside of the U.S., our international store base will grow by 25 percent and our overall global market share will continue to increase,” he added.
Looking forward, GameStop has said it expects comparable store sales to grow from 12 to 14 percent in its second quarter, and between 10-12 percent for the full fiscal year. The retailer also expects "strong tie ratios, significant industry investment, and a great title line-up will drive new video game software sales to double digit growth resulting in higher profitability for the company."
Said Fontaine, “We are very bullish on the future as three major metrics are transforming the business and accelerating the potential for GameStop growth. The installed base of video game consoles grew 34% in 2007, or nearly 31 million units, the highest incremental growth in the history of the business, and we are forecasting that hardware unit sell-thru will match these levels in 2008."
"Behind the huge hardware growth is the fact that the demographic for video gaming is expanding dramatically as industry figures indicate that 38% of game players are female. Finally, we have an outstanding line-up of new games coming during the rest of the year, including Nintendo’s Wii Fit, Konami’s Metal Gear Solid 4, Microsoft’s Gears of War 2, and Activision’s Guitar Hero 4," he concluded.
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