No Slowing The GameStop Money Train: Sales Up 18.8%
GameStop has all the money, according to its Q3 FY2013 earnings report.
The chain is reporting an 18.8 percent boost in Q3 sales when compared to Q2 2012. The jump is being connected to the release of Grand Theft Auto V, as well as strong Nintendo 3DS and 2Ds sales.
Net earnings spiked to $68.6 million, a 45.3% jump compared to $47.2 million one year ago.
“Our strong third quarter sales results give us great momentum as we enter the new console cycle. Consumer appetite for the new consoles is very strong judging by last week’s successful PS4 launch and the excitement for tonight’s Xbox One launch event. Globally, we are executing our unique playbook to maximize our position of strength.”
Is it just me, or has all the vitriol about GameStop subsided a bit over the last six months? I’m sure there are plenty of gamers out there who still take issue with the chain, but the World Internet Court has seemingly put its crosshairs elsewhere for now. That or everyone is temporarily distracted by shiny new consoles.
Check out the full press release below.
GRAPEVINE, Texas–(BUSINESS WIRE)–Nov. 21, 2013– GameStop Corp. (NYSE: GME), the world’s largest multichannel video game retailer, today reported sales and earnings for the third quarter ended Nov. 2, 2013.
Third Quarter Results
Total global sales for the third quarter of 2013 were $2.11 billion compared to $1.77 billion in the prior year quarter, an increase of 18.8%. Consolidated comparable store sales rose 20.5%, significantly above the forecasted range.
During the quarter, sales of new software increased by 43.1%, driven by the strong performance of recently released new titles, such as Rockstar Games’ Grand Theft Auto V. New hardware sales grew 15.3%, led by strong sell-thru ofNintendo 2DS and 3DS. Each of these categories outperformed the overall market, leading to 675 basis points of market share gain during the quarter. Pre-owned sales decreased 2.0%. Our new businesses, mobile and digital, had sales and receipts growth of 14.4% to $49.9 million and 8.6% to $137.9 million, respectively.
GameStop’s net earnings for the third quarter were $68.6 million, a 45.3% increase compared to adjusted net income of$47.2 million in the prior year quarter. Last year’s reconciliation of GAAP net loss to non-GAAP, or adjusted, net income is included with this release (Schedule III). Diluted earnings per share were $0.58, exceeding the high end of the company’s guidance by $0.03, resulting in a 52.6% increase compared to adjusted diluted earnings per share of $0.38in the prior year quarter.
“Our strong third quarter sales results give us great momentum as we enter the new console cycle,” stated Paul Raines, chief executive officer. “Consumer appetite for the new consoles is very strong judging by last week’s successful PS4 launch and the excitement for tonight’s Xbox One launch event. Globally, we are executing our unique playbook to maximize our position of strength.”
Capital Allocation Update
During the third quarter of 2013, GameStop repurchased approximately 1.84 million shares at an average price of$51.37, or $94.4 million worth of stock. In addition, the company also announced that its board of directors has approved a new $500 million share repurchase plan, replacing the remaining $217 million available on the existing authorization.
GameStop’s board of directors also declared a quarterly cash dividend of $0.275 per common share payable on Dec. 19, 2013 to shareholders of record at the close of business on Dec. 4, 2013.
For the fourth quarter of fiscal 2013, GameStop expects comparable store sales to range from +2.0% to +9.0%. Diluted earnings per share are expected to range from $1.97 to $2.14.
For fiscal year 2013, the company is increasing its previously announced full year diluted earnings per share guidance range of $3.00 to $3.20 to a new range of $3.08 to $3.25. Full year comparable store sales are expected to range from +1.5% to +4.5%.
Note: Current guidance only includes the effect of the shares repurchased thus far in fiscal 2013.