GameStop posts $9.08 billion in annual earnings
Game retail giant's revenue rises 3.1%, but profit falls 5.3% to $377.3 million; stock spikes after full-year outlook revised upward.
This morning, GameStop reported its earnings for its fourth fiscal quarter and 2009 fiscal year, which ended on January 30, 2010. The three-month period saw revenues rise slightly by 0.9 percent to $3.52 billion, but profits fall 7 percent to $215.9 million. For the full year, the company saw revenues go up 3.1 percent to $9.08 billion, but profits slip 5.3 percent to $377.8 million.
Despite the mixed picture, GameStop CEO Daniel DeMatteo was bullish. "GameStop delivered its second highest earnings year ever in fiscal 2009, in spite of the weak worldwide economic environment," he said in a statement. "We saw global market share growth as new software sales increased 1.2 percent."
He continued, "In 2010, we see great opportunity to deliver earnings growth by improving global operational efficiencies, expanding our leading market share, and utilizing the buy-sell-trade model to drive new and used software sales."
Indeed, GameStop is so optimistic about the current fiscal year that it predicts annual sales to increase 4 to 6 percent. Of that, the company expects new software sales to rise 2 to 5 percent and used product sales to climb between 5 and 10 percent. However, it also believes new hardware sales will fall between 5 and 10 percent despite a rumored Xbox 360 slim launch and the planned fall release of the PlayStation Move and Project Natal motion-sensing systems.
And while rivals like Game Crazy are closing down retail operations in the face of increased digital distribution, GameStop plans to spend $75 million opening 400 new stores worldwide. It also plans annual per-share earnings of between $2.58 and $2.68, a 14 percent to 18 percent increase over the current year's EPS. That latter figure sent GameStop's share price soaring on the New York Stock Exchange. It closed the day up 6.55 percent ($1.30) at $21.16.