Electronics Boutique Joins In Console Shortage Woes

Like Circuit City, GameStop, and Toys 'R' Us, U.S. game retailer Electronics Boutique has posted a lower-than-expected profit for the fourth quarter of 2004, citing the current console hardware shortage as a major factor. The shortage "affected not only the company's top line but also its margins due to lost sales of higher-margin software and accessories that typically accompany a hardware purchase," said EB's Chief Executive Jeffrey Griffiths. Griffith's statement echoed GameStop Chairman R. Richard Fontaine's assertion that: "There is no question that there was demand for the product, but not hardware product to satisfy demand." Despite the shortage, sales for the chain game retailer actually rose compared to last year's holiday season from $544.4 million to $666.0 million. Spurred by high-volume sellers like Halo 2 and Grand Theft Auto: San Andreas, as well as the new Nintendo DS handheld, same-store sales rose by 3.6 percent. But that didn't stop Electronic Boutique from revising its expected earnings per share down, presumably due to continued low hardware supply, switching expectations to the lower end of the $1.62 to $1.72 range for the quarter, and $2.20 to $2.30 range for the year.