GameStop sales fall as Xbox One, PS4 loom
Retailer reports total global sales for second quarter fell 10.7 percent, though mobile and digital categories on the rise; company "uniquely positioned" for upcoming console transition.
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GameStop today reported sales and earnings for the second quarter ended August 3, revealing overall global sales fell as next-generation consoles the Xbox One and PlayStation 4 loom on the horizon.
Total global sales for the period hit $1.38 billion, down 10.7 percent from the $1.55 billion recorded this time last year. Comparable store sales also fell 10.7 percent, which was slightly above the guidance announced in May.
GameStop's mobile and digital businesses grew during the period, jumping 121.4 percent to $55.4 million and 17.9 percent to $158 million, respectively. New software sales dropped 9.3 percent, while new hardware sales slumped further, dropping 19.4 percent.
Overall preowned sales at GameStop fell 6 percent "as consumers continue to wait for the launch of the new consoles later this year," the company said.
GameStop posted a profit of 10.5 million during the quarter, compared to net earnings of $21 million a year ago.
"Through two quarters, the year has played out as expected," GameStop CEO Paul Raines said in a statement. "During this console transition period, our financial results have been supported by the continued growth of our emerging businesses. This strength helped drive a 130 basis point improvement in gross margin rate for the second quarter."
"Of course, excitement continues to build for the upcoming new games and the launch of the PS4 and Xbox One," he added. "As the global gaming leader, GameStop is uniquely positioned to capitalize on the new, innovative products coming to market."
Despite the downturn in overall sales, GameStop raised earnings projections for the full year "based on the strong second quarter results as well as positive trends in new console preorders and higher-than-expected launch quantity allocation."
The Xbox One and PlayStation 4 launch in November. Sony has reported more than 1 million preorders for its next-generation console.
GameStop will hold an earnings call at 11 a.m. EDT today to discuss results and answer analyst and media questions. Check back later for more.