GameStop rakes in $7.1B in '07

Record-breaking financials marked by dramatic 46 percent profit rise during holiday quarter; megaretailer credits Super Mario Galaxy, Call of Duty 4, Guitar Hero III, Assassin's Creed, and Rock Band.

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Last month, AdWeek magazine revealed that GameStop, the world's biggest specialty retailer of games, had been successfully marketing games via its in-store television network. Today, the Texas-based retailer's annual earnings report revealed it successfully sold plenty of other games as well.

For its 2007 financial year, which ended February 2, 2008, GameStop revenues increased 33 percent to hit a massive $7.1 billion total. After debt retirement costs of $12.6 million, the company's net earnings--aka profit--for the 52-week period were $288.3 million. The retailer is enjoying a year-end cash balance of $857 million despite having had opened 586 stores worldwide during the period.

For the most recent quarter, GameStop reported net earnings of $189.8 million (up 46 percent) on revenue of nearly $2.9 billion (up 24.4 percent). One of the main reasons for the retail chain's successful holiday quarter was last year's bumper crop of top-shelf games. GameStop singled out five in particular as being best-sellers: Super Mario Galaxy, Call of Duty 4, Guitar Hero III, Assassin's Creed, and Rock Band. The company also cited its highly profitable used game business as a key revenue driver.

Console sales were also a big factor in GameStop's banner 2007 fiscal year. "What is particularly noteworthy is that 2007 was a transformative year with hardware sales setting records and the installed base of users reaching an all-time high," declared CEO R. Richard Fontaine in a statement. "Likewise, the expanding demographic profile of the video game player has moved this business into the mainstream of entertainment."

Looking ahead to the current fiscal year, which ends on January 31, 2009, GameStop's guidance is positive. The company predicts revenue growth of between 19 and 21 percent for the year, with sales rising 24 to 25 percent in the first fiscal quarter thanks to the releases of Super Smash Bros. Brawl, Devil May Cry 4, and the forthcoming Grand Theft Auto IV. The company expects to open another 575 to 600 stories during the 52-week reporting period.

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