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GameStop Reports Sales And Earnings For Fiscal 2012 And Provides 2013 Outlook

During fiscal 2012, GameStop generated $632.4 million in operating cash flow and spent $151.2 million in capital expenditures and other investments generating free cash flow of $481.2 million. The company repurchased $409.4 million of GameStop stock during fiscal 2012, including 3.2 million shares, or $74.7 million worth of stock, during the fourth quarter. In February 2012, the company initiated a dividend payout to its shareholders and paid out $102 million in dividends during 2012.

Thus far in fiscal 2013, GameStop has repurchased one million shares at an average price of $25.06, or $25.3 million worth of stock. Currently, there is $400 million remaining on the existing repurchase authorization.

On Feb. 19, 2013, the company announced a 10% increase to its annual dividend. On March 19, 2013, the company paid its quarterly dividend of $0.275 per share.

2013 Outlook

Paul Raines, chief executive officer, stated, “As we look towards the start of the new console cycle, our industry market model indicates a return to growth with the launch of new game systems. GameStop is strong, healthy and ready to lead the industry and its customers into the next phase of gaming.”

The video game industry is anticipating a strong finish to 2013 with the release of Grand Theft Auto V and the launch of at least one next generation console by holiday. Ahead of these events, GameStop expects the first half of the year to be challenging as consumers postpone purchases leading up to the fourth quarter console launch.

Based on current market information available, GameStop is providing the following financial guidance for fiscal 2013. Annual guidance is based on a comparison of 52 weeks for fiscal 2013 versus 53 weeks for fiscal year 2012.

First Quarter

Fiscal Year 2013
Total Sales -8.5% to -6.0% -8.0% to 0.0%
Comparable Store Sales -8.0% to -5.5% -6.0% to 1.5%
Depreciation & Amortization Expense (in millions) $42.0 to $44.0 $160.0 to $170.0
Interest Expense (in millions) $1.1 to $1.3 $4.0 to $5.0
Income Tax Rate 36.5% to 37.5% 36.5% to 37.5%
Operating Margin 3.8% to 4.2% 6.5% to 7.0%
Weighted Average Shares Outstanding 119,500,000 120,000,000
Diluted Earnings Per Share $0.38 to $0.43 $2.75 to $3.15

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