GameStop sales up 3.5% in Q3
Specialty retailer posts fifth straight quarter of revenue growth on strong slate of new releases, expects Kinect in short supply through holiday season.
The US retail gaming industry has been slowly emerging from a disastrous 2009, but it's still having a hard time posting consecutive months of growth. Those woes haven't been reflected in the results of the largest specialty gaming retailer, as GameStop today posted its fifth consecutive quarter of year-over-year sales growth.
For the three months ended October 30, GameStop reported total sales were up 3.5 percent to $1.9 billion. The retailer attributed the bump in part to a strong slate of new releases that pushed new software sales for the quarter up 9 percent. GameStop's top selling titles for the quarter were Halo: Reach, Madden NFL 2011, Fallout: New Vegas, NBA 2K11, and Medal of Honor.
Profits were also up for GameStop, as the company reported net income of $54.3 million for the quarter, up 4 percent from the $52.2 million it posted for the same period last year. The most profitable chunk of the company's business remains used game sales, which accounted for nearly 46 percent of the company's gross profits. However, new game sales brought in the largest share of sales for the company, making up 44 percent of total revenues for the quarter.
Although Microsoft's Kinect launched after the company's third quarter ended, the motion-sensing peripheral was a point of focus for the retailer. In a post-earnings conference call, GameStop president Tony Bartel said the company was "very pleased" with sales of the peripheral and said the company's "biggest opportunity" for the holiday season is simply keeping the Kinect in stock. He advised anyone who sees the system on shelves to pick it up, cautioning that it will be in short supply for the holidays.
Based on new game sales trends and the launches of the Kinect and PlayStation Move, GameStop raised its full-year earnings expectations. Previously, the retailer expected to post earnings per share of $2.58 to $2.68, but that range has been amended to $2.63 to $2.69.
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