In a press release related to its filing with the SEC, GameStop reported sales and earnings results for the second quarter ended August 1, 2009.
Sales were $1.74 billion. This is a 3.7% decrease compared to the same quarter last year. Comparable store sales went down 14.1%. The company said this was due to lower new console unit sales, a lack of strong new software titles, as compared to last year’s record releases, and customer spending down because of the weak economy.
The top five games
GameStop says the best 5 selling games during the quarter were THQ’s UFC 2009 Undisputed, Activision’s Prototype, EA’s Fight Night Round 4 and NCAA Football 2010, and Atari’s Ghostbusters.
“Due to the effects of the recession and strong prior year comparisons, the video game industry experienced a sharp decline in consumer spending during the quarter,” said Daniel DeMatteo, GameStop CEO. “Looking ahead, as the new title release schedule improves, we expect positive earnings growth in the back half of the year.”
The press release states the company’s updated guidance.
“Weak trends in consumer spending related to on-going economic uncertainties, and some key new title slippage such as Bioshock 2 , StarCraft II and Splinter Cell: Conviction, have prompted GameStop to forecast a lower and widened earnings range for the remainder of the year. In spite of these challenges, new software sales in the second half are expected to increase over the prior year period, led by highly-anticipated title releases such as Call of Duty: Modern Warfare 2, Assassin’s Creed 2 and Halo 3: ODST.”
“We now expect to generate free cash flow (a non-GAAP measure of operating cash flow less capital expenditures) of approximately $400 to $425 million, after having invested $175 million in capital improvements, including the opening of approximately 400 new stores worldwide.”
GameStop says it is the world’s largest video game and entertainment software retailer, with over 6,000 stores in 17 countries.
A recording of the company’s conference call with financial analysts is posted on the company’s website.
