GameStop profit climbs 13%

Grapevine, Texas GameStop Corp. announced Thursday that its first-quarter net income rose 13.4% to $70.4 million. The latest quarter included debt retirement costs of $2.9 million.

First-quarter sales rose 9.2% to $1.98 billion, while comp-store sales dipped 1.5%.

The sales and earnings results were a record for the company, led by a successful launch of the Nintendo DSi handheld system and strong releases of Capcom’s Resident Evil 5 and Street Fighter IV.

First-quarter comp-store sales were lower than expected, the company said, declining 1.5% due, it said, primarily to sharper recessionary effects in Europe and a slowdown of new console sales that occurred late in the quarter.

“During the quarter GameStop sustained its strong earnings growth momentum and exceeded earnings guidance despite less than planned comparable-store sales,” indicated Daniel DeMatteo, CEO. “Although new video-game software sales declined by 2.8%, lower-priced used products grew a robust 31.9%, illustrating that value is becoming more important to our customers.”

DeMatteo added that the company expects the back half of the year to be stronger than the first six months.