GameStop scores big jump in same store sales

GameStop Corp. grew sales and revenue in the second quarter, but it also took steps to expand its non-gaming business.

For the second quarter ended Aug. 1, the retailer’s net income rose 3% to $25.3 million from $24.6 million.Total global sales rose 2% to $1.76 billion from $1.73 billion, and consolidated global same-store sales increased 8.1% (10.8% in the U.S. and 1.8% internationally).

One-time costs related to GameStop’s acquisition of non-gaming retailer Geeknet Inc., as well as its expansion of its technology brands division (including Simply Mac, Spring Mobile and Cricket Wireless stores), hampered some profit growth. The company's CEO said, however, that trend is only temporary.

CEO Paul Raines said: “Results for the second quarter again exceeded our expectations, reflecting the mix of sales in our market-leading video game business and the continuing success of our diversified segments. During the quarter, we increased the number of Technology Brands stores by 33% and completed the acquisition of Geeknet, continuing the expansion of our non-gaming businesses. We are excited about the growth prospects of these businesses and expect them to deliver sustained profits over the next several years."

Sales in the mobile and consumer electronics and collectibles category drove overall sales growth, while new video game hardware and software sales fell. Pre-owned video game sales rose slightly.

“Results for the second quarter again exceeded our expectations, reflecting the mix of sales in our market-leading video game business and the continuing success of our diversified segments,” said Raines.

For the third quarter of fiscal 2015, GameStop expects same-store sales growth to range from 1-4%. Diluted earnings per share are expected to range from $0.53 to $0.60, compared to adjusted diluted earnings per share of $0.57 in the prior year quarter.

For fiscal year 2015, the company is raising its previously announced full year adjusted diluted earnings per share guidance range to $3.66 to $3.86 to account for the reduction in shares outstanding. Full year same-store sales are now expected to range from 2% to 7% above the prior year.