GameStop Sales Down, But Things Are Going As Planned
GameStop sales fell over the past quarter but despite that, the company says things are "playing out as expected."
The retailer's earnings report for the second quarter ending August 3 reveals an overall global sales decline. Total sales fell 10.7 percent, down from $1.55 billion to $1.38 billion, and comparable store sales also fell 10.7 percent, which is actually slightly above the company's projections. They obviously anticipated this dip.
Perhaps unsurprisingly, GameStop's mobile and digital businesses were on the rise, leaping 121.4 percent to $55.4 million and 17.9 percent to $158 million respectively. New software sales were down 9.3 percent while hardware sales dove 19.4 percent. Well, sure what with the new consoles on the horizon, few gamers are picking up consoles right now. As for pre-owned sales, those fell 6 percent. The company reported a profit of $10.5 million for the quarter, which is well down from the $21 million last year. But this is expected, as GameStop CEO Paul Raines said in a statement:
"Through two quarters, the year has played out as expected. 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. As the global gaming leader, GameStop is uniquely positioned to capitalize on the new, innovative products coming to market."
Due to the upcoming new generation, GameStop has raised their earnings projections for the full year. The PlayStation 4 and Xbox One launch in November in North America...and it will be pandemonium.
8/22/2013 11:03:41 AM Ben Dutka