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
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
Recently, IoT seems emerging as a solution vehicle for data analytics on real-world scenarios from setting a room temperature setting to predicting a component failure of an aircraft. Compared with developing an application or deploying a cloud service, is an IoT solution unique? If so, how? How does a typical IoT solution architecture consist? And what are the essential components and how are they relevant to each other? How does the security play out? What are the best practices in formulating...
In his session at @ThingsExpo, Arvind Radhakrishnen discussed how IoT offers new business models in banking and financial services organizations with the capability to revolutionize products, payments, channels, business processes and asset management built on strong architectural foundation. The following topics were covered: How IoT stands to impact various business parameters including customer experience, cost and risk management within BFS organizations.
An increasing number of companies are creating products that combine data with analytical capabilities. Running interactive queries on Big Data requires complex architectures to store and query data effectively, typically involving data streams, an choosing efficient file format/database and multiple independent systems that are tied together through custom-engineered pipelines. In his session at @BigDataExpo at @ThingsExpo, Tomer Levi, a senior software engineer at Intel’s Advanced Analytics ...
SYS-CON Events announced today that Elastifile will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Elastifile Cloud File System (ECFS) is software-defined data infrastructure designed for seamless and efficient management of dynamic workloads across heterogeneous environments. Elastifile provides the architecture needed to optimize your hybrid cloud environment, by facilitating efficient...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory?
While some vendors scramble to create and sell you a fancy solution for monitoring your spanking new Amazon Lambdas, hear how you can do it on the cheap using just built-in Java APIs yourself. By exploiting a little-known fact that Lambdas aren’t exactly single-threaded, you can effectively identify hot spots in your serverless code. In his session at @DevOpsSummit at 21st Cloud Expo, Dave Martin, Product owner at CA Technologies, will give a live demonstration and code walkthrough, showing how ...
SYS-CON Events announced today that Golden Gate University will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Since 1901, non-profit Golden Gate University (GGU) has been helping adults achieve their professional goals by providing high quality, practice-based undergraduate and graduate educational programs in law, taxation, business and related professions. Many of its courses are taug...
@DevOpsSummit at Cloud Expo taking place Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center, Santa Clara, CA, is co-located with the 21st International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is ...
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, will provide a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to...
DevOps at Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to w...
"We provide IoT solutions. We provide the most compatible solutions for many applications. Our solutions are industry agnostic and also protocol agnostic," explained Richard Han, Head of Sales and Marketing and Engineering at Systena America, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Given the popularity of the containers, further investment in the telco/cable industry is needed to transition existing VM-based solutions to containerized cloud native deployments. The networking architecture of the solution isolates the network traffic into different network planes (e.g., management, control, and media). This naturally makes support for multiple interfaces in container orchestration engines an indispensable requirement.
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
21st International Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Me...