(RTTNews) - Video game and entertainment software retailer GameStop Corp. (GME: News ) on Thursday reported a 12% increase in profit for the third quarter, helped by sales growth of new video game software and used video game products. Looking ahead, GameStop said that the holiday season has started strong and reiterated its earnings outlook for the fourth quarter. The company also tightened its earnings forecast range for the full year.

Q3 Results

The Grapevine, Texas-based company's net income for the third quarter increased to $52.23 million or $0.31 per share from $46.67 million or $0.28 per share in the year-ago quarter.

The results for the latest quarter include $2.5 million of debt retirement costs, or $1.6 million net of tax benefits. The year-ago quarter's results include merger-related costs of $16.6 million, or $10.5 million net of tax benefits.

On average, sixteen analysts polled by Thomson Reuters expected the company to report earnings of $0.30 per share for the quarter. Analysts' estimates typically exclude special items.

In early November, GameStop reiterated its outlook for third-quarter earnings to range between $0.27 and $0.33 per share, excluding debt retirement costs of $0.01 per share.

Total sales for the third quarter increased 8.2% to $1.83 billion from $1.70 billion in the year-ago period, and beat analysts' consensus revenue estimate of $1.73 billion for the quarter.
Despite gaining over 150 basis points in new video game market share during the quarter, GameStop's comparable store sales fell 7.8%, primarily due to a decline in new video game hardware sales. The company had earlier projected comparable store sales for the quarter to decline in the range of 11.0%-6.0%.

Daniel DeMatteo, Chief Executive Officer of GameStop, said, "A sharp focus on efficient operations in this challenging global economy delivered solid earnings results and significant market share gains. Gross margins expanded, led by a sequential 150 basis point improvement in the used category. Store foot traffic increased from the prior quarter, driven by strong new title releases and price cuts on all current generation platforms."

Segmental Review

Sales of new video game hardware for the third quarter decreased 2.1% to $321.4 million from $328.4 million a year ago. However, sales of new video game software grew 9.4% to $769.4 million from $703.3 million last year, and sales of used video game products climbed 19.4% to $507.7 million from $425.1 million in the previous-year quarter. Other sales declined to $236.2 million from $238.9 million in the prior-year quarter.

To receive FREE breaking news email alerts for GameStop Corp. and others in your portfolio

 1   2   3   Next Page