Welcome!

News Feed Item

GameStop Reports First Quarter 2014 Results

GameStop Corp. (NYSE: GME), a family of specialty retail brands that makes the most popular technologies affordable and simple, today reported sales and earnings for the first quarter ended May 3, 2014.

First Quarter Results

Total global sales for the first quarter of 2014 were $2.0 billion, a 7.0% increase compared to $1.87 billion in the prior year quarter. Consolidated comparable store sales increased 5.8%. Continued strong worldwide consumer demand for Microsoft’s Xbox One and Sony’s PlayStation 4 was the primary driver of the strong sales performance as the new hardware category grew 81.1% compared to the prior year quarter. From launch through April, total market sales in the U.S. of PlayStation 4 and Xbox One hardware have more than doubled the combined sales of PlayStation 3 and Xbox 360 hardware through their first six months of sales.

During the quarter, new software sales declined 20.4%, due to fewer AAA titles being launched this year compared to the first quarter of 2013. In spite of the decline in new software, pre-owned/value software improved 5.3% year-over-year as ongoing trade-ins toward new consoles improved inventory levels and subsequent sales growth. The mobile & consumer electronics category, which now includes Technology Brands results, rose over 100%, primarily driven by the contributions of Spring Mobile and Simply Mac.

Non-GAAP digital receipts increased 9.5%, led by strong sales of Xbox One and PlayStation 4 digital currency as well as substantial international PC digital sales.

GameStop’s net earnings for the first quarter were $68.0 million, a 24.5% increase compared to net earnings of $54.6 million in the prior year quarter. Diluted earnings per share were $0.59, a 28.3% increase compared to diluted earnings per share of $0.46 in the prior year quarter.

“I am pleased to report solid financial and operational results in the first quarter. The next-gen console business is meeting our targets, our digital properties continue to grow and our new tech brands segment is positively contributing to our profitability,” said Paul Raines, chief executive officer. “As we discussed at our investor day, GameStop is well positioned to use its strengths to achieve growth from its diversified business segments: gaming, mobile, wireless and consumer electronics.”

Capital Allocation Update

During the first quarter of 2014, the company repurchased 1.33 million shares at an average price of $39.28, or $52.2 million of stock. There is now $405 million remaining on the existing repurchase authorization.

GameStop’s board of directors also declared a quarterly cash dividend of $0.33 per common share payable on June 17, 2014, to shareholders of record as of the close of business on June 4, 2014.

Earnings Guidance

For the second quarter of fiscal 2014, GameStop expects comparable store sales to range from +12.0% to +19.0%. Diluted earnings per share are expected to range from $0.12 to $0.20, representing a +33% to +122% increase over the prior year quarter.

For fiscal year 2014, the company is maintaining its previously announced full year diluted earnings per share guidance range of $3.40 to $3.70. Full year comparable store sales are expected to range from +6.0% to +12.0%.

Note: Current guidance only includes the effect of the shares repurchased thus far in fiscal 2014.

Conference Call Information

A conference call with GameStop Corp.’s management is scheduled for May 22, 2014 at 4:00 p.m. CDT to discuss the company’s financial results. The phone number for the call is 1-888-244-2430 and the pass code is 8959711. This call can also be accessed at GameStop Corp.’s investor relations home page at http://investor.GameStop.com/. The conference call will be archived for two months on GameStop’s corporate website.

About GameStop

GameStop Corp. (NYSE: GME), a Fortune 500 and S&P 500 company headquartered in Grapevine, Texas, is a global, multichannel video game, consumer electronics and wireless services retailer. GameStop operates more than 6,600 stores across 15 countries. The company’s consumer product network also includes www.gamestop.com; www.Kongregate.com, a leading browser-based game site; Game Informer® magazine, the world’s leading print and digital video game publication; and www.buymytronics.com, an online consumer electronics trade-in platform. In addition, our Technology Brands segment includes our Simply Mac, Spring Mobile and Cricket stores. Simply Mac, www.simplymac.com, operates 23 stores, selling the full line of Apple products, including laptops, tablets, smartphones and offering Apple certified warranty and repair services. Spring Mobile, http://springmobile.com, sells post-paid AT&T services and wireless products through its 210 AT&T branded stores. Cricket Wireless, www.cricketwireless.com, is a new AT&T brand offering pre-paid wireless services, devices and related accessories. We operate 37 Cricket stores in select markets throughout the United States.

General information about GameStop Corp. can be obtained at the company's corporate website. Follow GameStop on Twitter @ www.twitter.com/GameStop and find GameStop on Facebook @ www.facebook.com/GameStop.

Non-GAAP Measures

As a supplement to our financial results presented in accordance with U.S. generally accepted accounting principles (GAAP), GameStop uses certain non-GAAP measures, such as digital receipts, to provide a clearer perspective of the current operating performance of the company. GameStop defines digital receipts as the full amount paid by the customer for digital content at the time of sale and/or the value attributed to digital content when physical and digital products are sold combined. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the company's reported GAAP financial results.

Safe Harbor

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, the outlook for the second quarter and fiscal 2014, future financial and operating results, projected store openings, the company's plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of GameStop's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. GameStop undertakes no obligation to publicly update or revise any forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the inability to obtain sufficient quantities of product to meet consumer demand, including console hardware and accessories; the timing of release of video game titles for current generation consoles; the risks associated with international operations, wireless industry operations and the integration of acquisitions; the impact of increased competition and changing technology in the video game industry, including browser and mobile games and alternative methods of distribution; and economic, regulatory and other events, including litigation, that could reduce or impact consumer demand or affect the company’s business. Additional factors that could cause GameStop's results to differ materially from those described in the forward-looking statements can be found in GameStop's Annual Report on Form 10-K for the fiscal year ended Feb. 1, 2014 filed with the SEC and available at the SEC's Internet site at http://www.sec.gov or http://investor.GameStop.com.

     
GameStop Corp.
Condensed Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
 
13 weeks 13 weeks
ended ended
May 3, 2014 May 4, 2013
 
Net sales $ 1,996.3 $ 1,865.3
Cost of sales   1,369.9     1,287.0  
 
Gross profit 626.4 578.3
 
Selling, general and administrative
expenses 481.0 449.2
Depreciation and amortization   39.5     41.9  
 
Operating earnings 105.9 87.2
 
Interest expense, net   0.6     0.9  
 
 
Earnings before income tax expense 105.3 86.3
 
Income tax expense   37.3     31.7  
 
Net income $   68.0   $   54.6  
 
Net income per common share:
Basic $ 0.59 $ 0.46
Diluted $ 0.59 $ 0.46
 
Dividends per common share $ 0.33 $ 0.275
 
Weighted average common shares
outstanding:
Basic 115.1 118.4
Diluted 115.9 119.4
 
 
 

Percentage of Net Sales:

 
Net sales 100.0 % 100.0 %
Cost of sales   68.6 %   69.0 %
 
Gross profit 31.4 % 31.0 %
 
Selling, general and administrative
expenses 24.1 % 24.1 %
Depreciation and amortization   2.0 %   2.2 %
 
Operating earnings 5.3 % 4.7 %
 
Interest expense, net   0.0 %   0.1 %
 
 
Earnings before income tax expense 5.3 % 4.6 %
 
Income tax expense   1.9 %   1.7 %
 
Net income   3.4 %   2.9 %
 

     
GameStop Corp.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
 
May 3, May 4,
2014 2013
ASSETS:
Current assets:
Cash and cash equivalents $ 208.9 $ 153.7
Receivables, net 86.0 57.2
Merchandise inventories, net 1,200.1 1,112.3
Prepaid expenses and other current assets 90.2 91.9
Deferred income taxes 57.2 55.3
Total current assets 1,642.4 1,470.4
 
Property and equipment:
Land 21.0 22.2
Buildings & leasehold improvements 620.8 600.8
Fixtures and equipment 852.3 932.9
Total property and equipment 1,494.1 1,555.9
 
Less accumulated depreciation and amortization 1,029.8 1,055.2
Net property and equipment 464.3 500.7
 
Goodwill 1,422.7 1,378.2
Other noncurrent assets 278.1 203.8
Total assets $ 3,807.5 $ 3,553.1
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 612.3 $ 467.6
Accrued liabilities 734.5 676.1
Current portion of debt 77.7 0.0
Total current liabilities 1,424.5 1,143.7
 
 
Other long-term liabilities 115.8 113.1
Total liabilities 1,540.3 1,256.8
 
Stockholders' equity 2,267.2 2,296.3
Total liabilities and stockholders' equity $ 3,807.5 $ 3,553.1
 

             
GameStop Corp.
 
Schedule I
Sales Mix
(unaudited)
 
13 Weeks Ended 13 Weeks Ended
May 3, 2014 May 4, 2013
Net Percent Net Percent
Sales of Total   Sales of Total
Net Sales (in millions):
 
New video game hardware $

438.0

21.9

% $ 241.8 13.0 %
New video game software

559.9

28.0

% 703.2 37.7 %
Pre-owned and value video game products

602.9

30.2 % 572.6 30.7 %
Video game accessories

145.1

7.3

% 126.4 6.8 %
Digital 56.1 2.8 % 56.2 3.0 %
Mobile and consumer electronics 102.2 5.1 % 51.0 2.7 %
Other 92.1

4.7

% 114.1 6.1 %
       
Total $ 1,996.3 100.0 % $ 1,865.3 100.0 %
 
                           
 
Schedule II
Gross Profit Mix
(unaudited)
 
13 Weeks Ended 13 Weeks Ended
May 3, 2014 May 4, 2013
Gross Gross
Gross Profit Gross Profit
Profit Percent   Profit   Percent
 
Gross Profit (in millions):
 
New video game hardware $

44.7

10.2

% $ 20.3 8.4 %
New video game software

127.2

22.7

% 148.2 21.1 %
Pre-owned and value video game products

298.4

49.5

% 270.7 47.3 %
Video game accessories

55.0

37.9

% 49.8 39.4 %
Digital 35.8

63.8

% 37.3 66.4 %
Mobile and consumer electronics 37.0 36.2 % 12.6 24.7 %
Other 28.3 30.7 % 39.4 34.5 %
   
Total $ 626.4 31.4 % $ 578.3 31.0 %

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Amazon started as an online bookseller 20 years ago. Since then, it has evolved into a technology juggernaut that has disrupted multiple markets and industries and touches many aspects of our lives. It is a relentless technology and business model innovator driving disruption throughout numerous ecosystems. Amazon’s AWS revenues alone are approaching $16B a year making it one of the largest IT companies in the world. With dominant offerings in Cloud, IoT, eCommerce, Big Data, AI, Digital Assista...
While DevOps most critically and famously fosters collaboration, communication, and integration through cultural change, culture is more of an output than an input. In order to actively drive cultural evolution, organizations must make substantial organizational and process changes, and adopt new technologies, to encourage a DevOps culture. Moderated by Andi Mann, panelists discussed how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations might...
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), provided an overview of various initiatives to certify the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldwide re...
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists examined how DevOps helps to meet the de...
Both SaaS vendors and SaaS buyers are going “all-in” to hyperscale IaaS platforms such as AWS, which is disrupting the SaaS value proposition. Why should the enterprise SaaS consumer pay for the SaaS service if their data is resident in adjacent AWS S3 buckets? If both SaaS sellers and buyers are using the same cloud tools, automation and pay-per-transaction model offered by IaaS platforms, then why not host the “shrink-wrapped” software in the customers’ cloud? Further, serverless computing, cl...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities. In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, posited that disruption is inevitable for comp...
"When we talk about cloud without compromise what we're talking about is that when people think about 'I need the flexibility of the cloud' - it's the ability to create applications and run them in a cloud environment that's far more flexible,” explained Matthew Finnie, CTO of Interoute, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
No hype cycles or predictions of zillions of things here. IoT is big. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, Associate Partner at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He discussed the evaluation of communication standards and IoT messaging protocols, data analytics considerations, edge-to-cloud tec...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, discussed some of the security challenges of the IoT infrastructure and related how these aspects impact Smart Living. The material was delivered interac...
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
It is ironic, but perhaps not unexpected, that many organizations who want the benefits of using an Agile approach to deliver software use a waterfall approach to adopting Agile practices: they form plans, they set milestones, and they measure progress by how many teams they have engaged. Old habits die hard, but like most waterfall software projects, most waterfall-style Agile adoption efforts fail to produce the results desired. The problem is that to get the results they want, they have to ch...
In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, Doug Vanderweide, an instructor at Linux Academy, discussed why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers wit...
The Internet giants are fully embracing AI. All the services they offer to their customers are aimed at drawing a map of the world with the data they get. The AIs from these companies are used to build disruptive approaches that cannot be used by established enterprises, which are threatened by these disruptions. However, most leaders underestimate the effect this will have on their businesses. In his session at 21st Cloud Expo, Rene Buest, Director Market Research & Technology Evangelism at Ara...