GameStop reports record FY earnings

GRAPEVINE, Texas GameStop today reported that net earnings were $189.8 million for the 13-week fourth quarter of 2007, as compared to net earnings of $129.8 million for the 14-week fourth quarter of 2006, an increase of 46.2%. Diluted earnings per share were $1.14, compared to 81 cents per diluted share in the prior year quarter.

Sales for the quarter increased 24.4% to $2.9 billion in the fourth quarter, in comparison to $2.3 billion in the prior year quarter. On a comparable-store basis, sales increased 17.4% during the fourth quarter.

Net earnings were $288.3 million for the 52-week fiscal year 2007, including debt retirement costs of $12.6 million ($7.9 million, net of tax benefits), as compared to earnings of $158.3 million for the 53-week fiscal year 2006, an increase of 82.1%. Diluted earnings per share were $1.75 for fiscal 2007, including debt retirement costs of 5 cents per diluted share, as compared to $1.00 per diluted share in fiscal 2006.

Richard Fontaine, chairman and ceo, indicated, "Our performance in 2007 was impressive from many perspectives. But what is particularly noteworthy is that 2007 was a transformative year with hardware sales setting records and the installed base of users reaching an all-time high. Likewise, the expanding demographic profile of the video game player has moved this business into the mainstream of entertainment. This will be compounded by a strong 2008 video game title lineup and the value aspect of GameStop’s used model that appeals to a broad base of budget conscious consumers."

For fiscal 2008, sales are projected to grow between 19% and 21%, with comparable-store sales ranging from up 10.0% to 12%, driven by a strong lineup of video game title releases across all platforms. Diluted earnings per share for the full year are expected to range from $2.25 to $2.34, an increase of between 25% and 30% over fiscal 2007. GameStop expects to open between 575 and 600 stores worldwide in fiscal 2008.

For the first quarter of fiscal 2008, the company expects comparable-store sales to range from +24% to +25%, led by continued demand for all console and handheld systems as well as a strong slate of new video game releases. Diluted earnings per share are expected to range from 32 cents to 33 cents.