GameStop Posts Profit As Digital Rises 53%

Games retailer GameStop has posted financial results for the first quarter of the 2011 fiscal year, noting a rise in both profits and revenue thanks in part to an increase in digital game sales. Grapevine, TX-based GameStop has been placing an emphasis on its digital growth as it continues to transition from a primarily packaged games-focused retailer to one that is also agile in the growing digital space. For the period ended April 30, the company revealed that the top selling game during the quarter was Nintendo's Pokemon Black and White, followed by Mortal Kombat from Warner Entertainment, Capcom's Marvel vs. Capcom 3: Fate of Two Worlds, Activision's Call of Duty: Black Ops and THQ's Homefront. Overall, GameStop saw revenue increase by 9.5 percent to $2.28 billion, compared to $2.08 billion for the same quarter a year ago. Profits also saw a rise, up 6.9 percent to $80.4 million, compared to last fiscal year's $75.2 million. Digital sales increased by 53 percent compared to the same quarter in the last fiscal year, while total sales of stores open for at least one year saw a 5.3 percent increase year-over-year. The company cited strong HD console sales, the Nintendo 3DS launch and a 9.5 percent growth in pre-owned products as causes for the increase. The retailer said sales of used video game products was $625 million, or 24.7 percent of GameStop's total quarterly revenue. While the segment only made up about a quarter of the company's sales, pre-owned products accounted for 48 percent of GameStop's gross profits, or $300 million. Looking to the second fiscal quarter (May-July), GameStop noted that it expects comparable store sales to lie somewhere between a 2 percent decrease to flat, although it said that it expects comparable store sales for the full fiscal year to increase year-over-year, up 3.5-5.5 percent. GameStop recently reported fiscal 2010 sales of $9.47 billion for the fiscal year ended in January.