Video game and entertainment software retailer

GameStop

(GME) - Get Report

reported strong holiday sales after the close Wednesday, a day after rival

Electronics Boutique

(ELBO)

said that its holiday sales also were stronger than expected.

GameStop's sales for the nine-week period ended Jan. 3 totaled $508.6 million, a 21% increase over the 2002 holiday season, the company said. Comparable-store sales increased 4.9% in the 2003 season, as video game software sales surged 29%.

On Tuesday, Electronics Boutique reported that same-store sales for the nine-week holiday period ending Jan. 3 increased by 2.5%, while total sales grew 24.4% to $544.4 million, up from $437.6 million for the same period a year ago.

Electronics Boutique's report pushed its shares up by more than 13% and

gave a lift to video-game makers. GameStop tagged along, gaining about 12% on Tuesday. On Wednesday, GameStop closed with a loss of 95 cents, or 5.3%, to $17.05. Following the postclose announcement, GameStop was trading up 75 cents, or 4.1%, to $17.75.

The company also said that it now expects same-store sales to increase by 2% or 3% for the fourth quarter, exceeding previous guidance, which ranged from a decrease of 2% to an increase of 2%. Diluted earnings per share for quarter are now expected to range from 65 cents to 66 cents, and full-year earnings will range from $1.04 to $1.05 per share, the high range of previous guidance.

The Grapevine, Texas, company will report complete financial results on Feb. 18.