Electronics Boutique reports record Q1 sales

Electronics Boutique today announced record financial results for its fiscal first quarter ending May 1, 2004. The 13-week period saw EB tally sales of $372.4 million--up 23 percent from the same period a year earlier. The company also said it continued to gain market share among game retailers.

However, the company's operating costs also jumped, by 28 percent for the most recent quarter. Impact on the bottom line resulted in profits that were $126,000 less than the same quarter a year earlier. The company reported profits of $3.046 million for the quarter, compared to $3.172 million the year earlier.

EB attributes its strong Q1 performance to a 28 percent increase in total video game software sales, as well as a 19 percent increase in total hardware sales, compared to the first fiscal quarter of last year.

Comparable store sales in Q1 fell by 2.5 percent, which was in line with EB's expectations. The company noted that last year's Q1 sales were particularly strong thanks to the launch of the GBA SP and the release of The Legend of Zelda: The Wind Waker.

"Electronics Boutique had a great first quarter. We delivered strong software sales that outperformed our industry, and we posted solid preplayed sales. In particular, our US strip-center and international stores continued to deliver excellent results, underscoring the value of our store-expansion strategy," said Jeffrey Griffiths, president and CEO of Electronics Boutique. "During the quarter, we continued to implement this strategy, opening 104 new stores. We plan to open an additional 300 new locations, bringing our total number of new stores to 400 for fiscal year 2005. As these new stores mature over the next several quarters, we expect to achieve increased sales and operating margin."

EB expects its total sales for the full fiscal year 2005 to increase by between 17 and 21 percent (to $1.87 billion to $1.94 billion) over the previous year.

"Based on what we saw at the Electronic Entertainment Expo, we have a very positive outlook for the remainder of the year," added Griffiths. "We believe that our industry will continue to grow in the coming quarters, fueled by the recent price drop of Sony's PlayStation 2 and Microsoft's Xbox, as well as an exciting lineup of new software titles in the latter half of the year."