GameStop earnings soar sevenfold
Three-month net profits jump 686 percent as company finishes a record six months.
While individual publishers succeed or fail in a growing game market, retailers benefit regardless of which titles turn out to be the biggest sellers. GameStop has been benefiting quite a bit lately, as the company today posted its second-quarter financial results, with net earnings nearly seven times what they were for the same stretch of time last year.
For the 13 weeks ended August 4, GameStop reported net earnings of $21.8 million, up 686 percent from the nearly $3.2 million the company posted in its second fiscal quarter last year. Revenues were also up, as the company reported more than $1.3 billion in sales for the quarter, compared to the $963 million it managed in the previous second quarter.
During a conference call with investors, GameStop executives called it the best-ever second-quarter performance in the company's history, capping off a record first half of the year. New hardware was a recurring theme on the call, with the executives noting that PlayStation 3 sales have doubled since the 60GB system received a price cut with no sign of slowing down, and that the Wii is expected to remain in bafflingly short supply until 2008.
"We have been getting a [Wii] shipment every week," said vice chairman and COO Dan DeMatteo. "And every week we ship the products to the stores, and I expect it to slow down. And it never does. I just don't know where the demand is."
While any retailer that sells games stands to benefit from a booming industry, GameStop CEO Dick Fontaine said that the company is exceeding the competition. For the year-to-date, GameStop has accounted for a larger slice of the retail market in every country in which it does business. Citing data from the industry-tracking NPD Group, Fontaine said that GameStop's US market share has now grown to 23 percent.