GameStop earnings soar, raises FY outlook

GRAPEVINE, Texas GameStop Corp. today announced that net earnings for its second quarter ended Aug. 4 increased 586% over 2006 to $21.8 million. Diluted earnings per share were 13 cents for the second quarter of 2007, including debt retirement costs of 1 cent per diluted share, exceeding the high-end of previously released guidance by 6 cents per share.

Total sales increased 38.9% to $1.34 billion in comparison to $963.3 million in the prior year quarter. Comparable-store sales increased 29.1% during the second quarter, also beating previously released guidance of 16% to 18%.

R. Richard Fontaine, GameStop's chairman and ceo, stated, "GameStop's outstanding second quarter was fueled by continued consumer demand for all the prevalent hardware platforms and the compelling games released during the quarter. It is apparent that the growing base of gaming consumers is well served by GameStop's new and used model, our increasing number of convenient locations and outstanding customer service provided by our store 'gamers'."

For the third quarter of fiscal 2007, GameStop is forecasting an increase in comparable-store sales to range from 30% to 32%. Diluted earnings per share are expected to range from 19 cents to 21 cents compared to earnings per share of 9 cents in the third quarter of 2006.

The company said that because of its strong performance in the second quarter, it is raising its full year 2007 diluted earnings per share guidance to range from $1.45 to $1.48. Total revenues are now projected to grow between 20% and 22%, with expected comparable- store sales expected to increase by 15% to 17%.