GameStop Results Exceed Estimates

Officials from U.S. video games retailer GameStop have announced financial results for the company’s first full quarter since completing a merger/acquisition with rival Electronics Boutique, with figures that exceed previous Wall Street estimates. In the fiscal fourth quarter ended January 28th net income for the company rose to $85 million, or $1.10 per share, from a figure of $34.5 million, or 64 cents per share, at the same time last year. Sales more than doubled from $708.7 million to $1.67 billion due to the merger with Electronics Boutique, with sales of comparable GameStop stores actually falling slightly. Operating margins widened to 6.2 percent from 5.4 percent a year earlier. According to Reuters Estimates, analysts had expected a profit of $1.07 a share, on revenue of $1.66 billion. "We achieved record sales, increased gross margins and kept expenses well under control in the midst of explosive growth," CEO Richard Fontaine said in a statement. For the first quarter, the company said it expects comparable store sales to decline from 7 percent to 9 percent from a year ago, with the previous year’s results being artificially boosted by the launch of the PSP. Comparable stores sales are predicted to rise by 6 to 9 percent in the current fiscal year, thanks to the launch of the PlayStation 3 and Nintendo Revolution. The company also predicted that earnings per share would grow by around 25 percent annually over the next three years, with shares rising by 9 percent as a result.