GameStop reports strong 3Q earnings

GRAPEVINE, Texas GameStop today reported that earnings for the third quarter ended Nov. 3 were $52 million. Diluted earnings per share were 31 cents for the third quarter of 2007.

The company reported that total sales increased 59.3% to $1.6 billion in comparison to $1 billion in the prior year quarter. Comparable-store sales increased 46.3% during the third quarter, also beating previously released guidance of 30% to 32%.

Richard Fontaine, GameStop’s chairman and ceo, stated, “Our third quarter sales and earnings are a reflection of not only the real momentum in the video game business as a whole, but a particularly strong statement that GameStop’s model continues to run ahead of the growth curve. We had an outstanding quarter both domestically and internationally, while our e-commerce division, GameStop.com, and video game publication, Game Informer, had record quarters."

For the fourth quarter of fiscal 2007, GameStop is forecasting comparable-store sales to range from up 7% to up 9%, on top of comparable-store sales of 26.5% in the fourth quarter of fiscal 2006 when the Nintendo Wii and Sony’s Playstation 3 were launched. Diluted earnings per share are expected to range from 95 cents to 97 cents compared to earnings per share of 81 cents in the fourth quarter of 2006.

The company has also raised its fourth quarter guidance. The company now expects full year 2007 diluted earnings per share guidance to range from $1.61 to $1.63. Total revenues are now projected to grow between 28% and 29%, with expected comparable-store sales ranging from up 20% to up 21%.