GameStop Reports First Quarter 2012 Results

GameStop Corp. (NYSE: GME), the world’s largest multichannel video game retailer, today reported sales and earnings for the first quarter ended April 28, 2012.

First Quarter Results

Total global sales for the first quarter of 2012 were $2.00 billion compared to $2.28 billion in the prior year quarter, a decrease of 12.2%. As announced last week, consolidated comparable store sales decreased 12.5% compared to the prior year quarter.

Paul Raines, chief executive officer, stated, “GameStop continues to outperform the market in new game sales through the late stages of this console cycle. Despite slower store traffic during the quarter, we achieved our earnings target due primarily to gross margin expansion and positive profit contributions from our pre-owned, mobile and digital businesses. We expect those segments to fill the profitability gap as we transition to the new console cycle.”

During the quarter, sales in the pre-owned and Other categories were down slightly, while sales in new hardware and software declined more than expected. Digital receipts, which are included in the Other category, increased 23% over the first quarter of 2011. Mobile sales, also included in the Other category, were $12 million, on plan to reach the company’s goal for mobile sales of $150 to $200 million in 2012.

GameStop’s net earnings for the first quarter were $72.5 million compared to net earnings of $80.4 million in the prior year quarter. As announced last week, diluted earnings per share were $0.54, compared to diluted earnings per share of $0.56 in the prior year quarter.

Capital Allocation Update

During the first quarter of 2012, GameStop repurchased 5.35 million shares at an average price of $22.70, or $121.5 million worth of stock. As of today, $455 million remains available for share repurchase under the current stock buyback authorization.

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