Diluted EPS beats high end of guidance by $0.02
Gross margin rate increases 130 basis points
GRAPEVINE, Texas--(BUSINESS WIRE)--
GameStop Corp. (NYSE: GME), the world’s largest multichannel video game
retailer, today reported sales and earnings for the second quarter ended
Aug. 3, 2013.
Second Quarter Results
Total global sales for the second quarter of 2013 were $1.38 billion
compared to $1.55 billion in the prior year quarter, a decrease of
10.7%. Consolidated comparable store sales also decreased 10.7%,
slightly better than the guidance provided on May 23.
During the quarter, mobile sales expanded 121.4% to $55.1 million and
digital receipts grew 17.9% to $158.0 million. Sales of new software
decreased 9.3%, outperforming the overall market and leading to 290
basis points of market share gain during the quarter. New hardware sales
declined 19.4% and pre-owned sales decreased 6.0% as consumers continue
to wait for the launch of the new consoles later this year.
GameStop’s net earnings for the second quarter were $10.5 million
compared to net earnings of $21.0 million in the prior year quarter.
Diluted earnings per share were $0.09, exceeding the high end of the
company’s guidance by $0.02. Expense control and gross margin
improvement were the primary drivers of the better-than-expected results.
“Through two quarters, the year has played out as expected,” stated Paul
Raines, chief executive officer. “During this console transition period,
our financial results have been supported by the continued growth of our
emerging businesses. This strength helped drive a 130 basis point
improvement in gross margin rate for the second quarter.”
Raines continued, “Of course, excitement continues to build for the
upcoming new games and the launch of the PS4 and Xbox One. As the global
gaming leader, GameStop is uniquely positioned to capitalize on the new,
innovative products coming to market.”
Capital Allocation Update
During the second quarter of 2013, GameStop repurchased approximately
2.39 million shares at an average price of $37.21, or $88.9 million
worth of stock. There is now approximately $311 million remaining on the
existing repurchase authorization.
GameStop’s board of directors also declared a quarterly cash dividend of
$0.275 per common share payable on Sept. 19, 2013 to shareholders of
record at the close of business on Sept. 3, 2013.
For the third quarter of fiscal 2013, GameStop expects comparable store
sales to range from +11.0% to +15.0%. Diluted earnings per share are
expected to range from $0.50 to $0.55.