GameStop made $68M in profit in the past three months, up 24% over last year
Total global sales for the quarter ended May 3 came in at $2 billion, up 7 percent thanks to the release of Xbox One and PS4.
GameStop reported earnings today for the quarter ended May 3, and it was good news for the Grapevine, Texas video game giant. The retailer posted $2 billion in revenue, up 7 percent compared to the $1.87 billion it hauled in last year. Profit for the quarter was $68 million, a healthy increase of 24.5 percent compared to last year's net earnings of $54.6 million.
Continued strong worldwide sales of the Xbox One and PlayStation 4 was the "primary" driver of GameStop's performance in the quarter. The company's new hardware category surged 81.1 percent compared to this time last year. In addition, GameStop says that combined Xbox One and PS4 sales in the US from November until April were more than double than sales of the Xbox 360 and PlayStation 3 over the same period of time. That's good news for GameStop.
GameStop's digital business also grew during the quarter, rising 9.5 percent thanks to the sale of digital items for the Xbox One and PS4, as well as "substantial" international PC sales. The retailer's mobile electronics category was also on the up, rising 100 percent year-over-year thanks to revenue from GameStop's new offshoot brands Spring Mobile and Simply Mac.
It wasn't all good news for GameStop, though, as new software sales fell 20.4 percent due to fewer AAA titles launching in the quarter compared to last year, GameStop said. Despite the contraction in new software sales, GameStop's pre-owned business jumped 5.3 percent year-over-year. This growth was attributed to gamers heading to GameStop to trade in their wares to upgrade to new consoles, the retailer said.
"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," GameStop CEO Paul Raines said in a statement.
GameStop's fortunes are only going to improve next quarter and into the full year, the company said. For the next quarter, GameStop expects comparable store sales to range from +12 percent to +19 percent year-over-year. And for the full year, GameStop says it expects comparable store sales to grow in the range of +6 percent to +12 percent.
GameStop will hold an earnings call today at 5 p.m. EDT to discuss these results and analyst analyst and media questions. Check back later for more.