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| [May 17, 2012] |
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GameStop Reports First Quarter 2012 Results
GRAPEVINE, Texas --(Business Wire)--
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.
GameStop's board of directors also declared a quarterly cash dividend of
$0.15 per common share payable on June 12, 2012 to shareholders of
record at the close of business on May 29, 2012.
Earnings Guidance
For the second quarter of fiscal 2012, GameStop expects comparable store
sales to range from -11.0% to -5.0%. Diluted earnings per share are
expected to range from $0.10 to $0.18.
The company maintains its previously announced full year diluted
earnings per share guidance range of $3.10 to $3.30. Full year
comparable store sales are expected to range from -5.0% to flat.
Note: Current guidance only includes the effect of the shares purchased
thus far in fiscal 2012.
Conference Call and Webcast Information
GameStop will host a first quarter earnings conference call at 10:00
a.m. CDT (News - Alert) on May 17, 2012. The phone number for the call is 877-719-9795
and the pass code is 5854128. The call can also be accessed at GameStop
Corp.'s investor relations website at http://investor.GameStop.com/.
The conference call will be archived for two months on GameStop's
investor website.
About GameStop
GameStop Corp. (NYSE: GME), a Fortune 500 and S&P 500 company
headquartered in Grapevine, Texas, is the world's largest multichannel
video game retailer. GameStop's retail network and family of brands
include 6,614 company-operated stores in 15 countries worldwide and
online at www.GameStop.com.
The network also includes: www.Kongregate.com,
a leading browser-based game site; Game Informer(R) magazine, the
leading multi-platform video game publication; Spawn Labs, a streaming
technology company; and a digital PC game distribution platform
available at www.GameStop.com/pc.
General information on GameStop Corp. can be obtained at the company's
corporate website. Follow GameStop on Twitter (News - Alert) @ www.twitter.com/GameStop
and find GameStop on Facebook (News - Alert) @ www.facebook.com/GameStop.
Safe Harbor
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
statements may include, but are not limited to, the outlook for the
second quarter and fiscal 2012, future financial and operating results,
projected store openings, the company's plans, objectives, expectations
and intentions, and other statements that are not historical facts. Such
statements are based upon the current beliefs and expectations of
GameStop's management and are subject to significant risks and
uncertainties. Actual results may differ from those set forth in the
forward-looking statements. GameStop undertakes no obligation to
publicly update or revise any forward-looking statements. The following
factors, among others, could cause actual results to differ from those
set forth in the forward-looking statements: the inability to obtain
sufficient quantities of product to meet consumer demand, including
console hardware and accessories; the timing of release of video game
titles for current generation consoles; the launch of next generation
consoles and the features of such consoles; the cyclical nature of the
video game industry; the risks associated with expanded international
operations and the integration of acquisitions; the impact of increased
competition and changing technology in the video game industry,
including browser and mobile games and alternative methods of
distribution; and economic, regulatory and other events, including
litigation, that could reduce or impact consumer demand or affect the
company's business. Additional factors that could cause GameStop's
results to differ materially from those described in the forward-looking
statements can be found in GameStop's Annual Report on Form 10-K for the
fiscal year ended Jan. 28, 2012 filed with the SEC (News - Alert) and available at the
SEC's Internet site at http://www.sec.gov
or http://investor.GameStop.com.
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GameStop Corp.
|
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Statements of Operations
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(in millions, except per share data)
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13 weeks
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13 weeks
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ended
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ended
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April 28, 2012
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April 30, 2011
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Sales
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$
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2,002.2
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|
|
$
|
2,281.4
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|
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Cost of sales
|
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|
1,402.3
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|
|
|
1,661.2
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|
|
|
|
|
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Gross profit
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|
599.9
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|
|
|
620.2
|
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|
|
|
|
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|
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Selling, general and administrative
|
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|
|
|
|
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expenses
|
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440.4
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|
|
|
442.7
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|
|
Depreciation and amortization
|
|
|
44.5
|
|
|
|
|
46.4
|
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|
|
|
|
|
|
|
|
Operating earnings
|
|
|
115.0
|
|
|
|
|
131.1
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|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
0.4
|
|
|
|
|
6.1
|
|
|
Earnings before income
|
|
|
|
|
|
|
tax expense
|
|
|
114.6
|
|
|
|
|
125.0
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
42.2
|
|
|
|
|
45.0
|
|
|
|
|
|
|
|
|
|
Consolidated net income
|
|
|
72.4
|
|
|
|
|
80.0
|
|
|
Net loss attributable to noncontrolling interests
|
|
|
0.1
|
|
|
|
|
0.4
|
|
|
Consolidated net income attributable to GameStop
|
|
$
|
72.5
|
|
|
|
$
|
80.4
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|
|
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|
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Net income per common share:
|
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|
|
|
|
|
Basic1
|
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$
|
0.54
|
|
|
|
$
|
0.56
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|
|
Diluted1
|
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$
|
0.54
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|
|
$
|
0.56
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Dividends per common share
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$
|
0.15
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|
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$
|
-
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Weighted average common shares
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outstanding:
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|
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Basic
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|
|
134.0
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|
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142.7
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Diluted
|
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134.8
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143.7
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Percentage of Sales:
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Sales
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|
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100.0
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%
|
|
|
|
100.0
|
%
|
|
Cost of sales
|
|
|
70.0
|
%
|
|
|
|
72.8
|
%
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
30.0
|
%
|
|
|
|
27.2
|
%
|
|
|
|
|
|
|
|
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SG&A expenses
|
|
|
22.0
|
%
|
|
|
|
19.4
|
%
|
|
Depreciation and amortization
|
|
|
2.3
|
%
|
|
|
|
2.0
|
%
|
|
|
|
|
|
|
|
|
Operating earnings
|
|
|
5.7
|
%
|
|
|
|
5.8
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%
|
|
|
|
|
|
|
|
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Interest expense, net
|
|
|
0.0
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%
|
|
|
|
0.3
|
%
|
|
|
|
|
|
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|
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Earnings before income
|
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|
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|
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tax expense
|
|
|
5.7
|
%
|
|
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
2.1
|
%
|
|
|
|
2.0
|
%
|
|
Consolidated net income
|
|
|
3.6
|
%
|
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interests
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|
|
0.0
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%
|
|
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
Consolidated net income attributable to GameStop
|
|
|
3.6
|
%
|
|
|
|
3.5
|
%
|
|
|
|
|
|
|
|
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|
|
|
|
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1 Basic net income per share and diluted net income per
share are calculated based on consolidated net income attributable
to GameStop.
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GameStop Corp.
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Balance Sheets
|
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(in millions, except per share data)
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April 28,
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April 30,
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2012
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2011
|
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ASSETS:
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Current assets:
|
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|
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|
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Cash and cash equivalents
|
|
$
|
329.1
|
|
|
|
$
|
395.8
|
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|
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Receivables, net
|
|
|
48.1
|
|
|
|
|
50.6
|
|
|
|
Merchandise inventories
|
|
|
1,118.2
|
|
|
|
|
1,306.1
|
|
|
|
Prepaid expenses and other current assets
|
|
|
101.0
|
|
|
|
|
106.2
|
|
|
|
Deferred taxes
|
|
|
|
39.2
|
|
|
|
|
24.1
|
|
|
|
|
Total current assets
|
|
|
1,635.6
|
|
|
|
|
1,882.8
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment:
|
|
|
|
|
|
|
|
|
Land
|
|
|
|
22.4
|
|
|
|
|
25.7
|
|
|
|
Buildings & leasehold improvements
|
|
|
602.2
|
|
|
|
|
590.8
|
|
|
|
Fixtures and equipment
|
|
|
877.3
|
|
|
|
|
840.7
|
|
|
|
|
|
|
|
1,501.9
|
|
|
|
|
1,457.2
|
|
|
|
Less accumulated depreciation and amortization
|
|
|
952.7
|
|
|
|
|
837.8
|
|
|
|
|
Net property and equipment
|
|
|
549.2
|
|
|
|
|
619.4
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill, net
|
|
|
|
2,021.3
|
|
|
|
|
2,081.2
|
|
|
Other noncurrent assets
|
|
|
|
252.9
|
|
|
|
|
344.0
|
|
|
|
|
Total assets
|
|
$
|
4,459.0
|
|
|
|
$
|
4,927.4
|
|
|
|
|
|
|
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|
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|
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|
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|
|
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
656.4
|
|
|
|
$
|
872.2
|
|
|
|
Accrued liabilities
|
|
|
662.6
|
|
|
|
|
629.1
|
|
|
|
|
Total current liabilities
|
|
|
1,319.0
|
|
|
|
|
1,501.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
|
|
162.7
|
|
|
|
|
177.2
|
|
|
Senior notes payable, net of discount
|
|
|
0.0
|
|
|
|
|
249.2
|
|
|
|
|
Total liabilities
|
|
|
1,481.7
|
|
|
|
|
1,927.7
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Preferred stock - authorized 5.0 shares; no shares
|
|
|
|
|
|
|
|
|
issued or outstanding
|
|
|
--
|
|
|
|
|
--
|
|
|
|
Class A common stock - $.001 par value; authorized 300.0 shares;
|
|
|
|
|
|
|
|
|
132.0 and 141.3 shares outstanding, respectively
|
|
|
0.1
|
|
|
|
|
0.1
|
|
|
|
Additional paid-in-capital
|
|
|
611.3
|
|
|
|
|
823.1
|
|
|
|
Accumulated other comprehensive income
|
|
|
170.4
|
|
|
|
|
292.3
|
|
|
|
Retained earnings
|
|
|
2,197.6
|
|
|
|
|
1,886.2
|
|
|
|
|
Equity attributable to GameStop Corp. stockholders
|
|
|
2,979.4
|
|
|
|
|
3,001.7
|
|
|
|
Equity(deficit) attributable to noncontrolling interest
|
|
|
(2.1
|
)
|
|
|
|
(2.0
|
)
|
|
|
|
Total equity
|
|
|
2,977.3
|
|
|
|
|
2,999.7
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
4,459.0
|
|
|
|
$
|
4,927.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GameStop Corp.
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
Schedule I
|
|
Sales Mix
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
|
|
13 Weeks Ended
|
|
|
|
April 28, 2012
|
|
|
|
April 30, 2011
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
Percent
|
|
|
|
Sales
|
|
|
of Total
|
|
|
|
Sales
|
|
|
of Total
|
|
Sales (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New video game hardware
|
|
$
|
348.6
|
|
|
17.4
|
%
|
|
|
|
$
|
432.4
|
|
|
19.0
|
%
|
|
New video game software
|
|
|
731.1
|
|
|
36.5
|
%
|
|
|
|
|
914.7
|
|
|
40.1
|
%
|
|
Used video game products
|
|
|
619.0
|
|
|
30.9
|
%
|
|
|
|
|
625.0
|
|
|
27.4
|
%
|
|
Other
|
|
|
303.5
|
|
|
15.2
|
%
|
|
|
|
|
309.3
|
|
|
13.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,002.2
|
|
|
100.0
|
%
|
|
|
|
$
|
2,281.4
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
GameStop Corp.
|
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|
|
|
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|
|
|
|
Schedule II
|
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Gross Profit Mix
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
|
|
13 Weeks Ended
|
|
|
|
April 28, 2012
|
|
|
|
April 30, 2011
|
|
|
|
|
|
|
Gross
|
|
|
|
|
|
|
Gross
|
|
|
|
Gross
|
|
|
Profit
|
|
|
|
Gross
|
|
|
Profit
|
|
|
|
Profit
|
|
|
Percent
|
|
|
|
Profit
|
|
|
Percent
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New video game hardware
|
|
$
|
22.9
|
|
|
6.6
|
%
|
|
|
|
$
|
30.1
|
|
|
7.0
|
%
|
|
New video game software
|
|
|
150.0
|
|
|
20.5
|
%
|
|
|
|
|
174.9
|
|
|
19.1
|
%
|
|
Used video game products
|
|
|
304.2
|
|
|
49.1
|
%
|
|
|
|
|
300.0
|
|
|
48.0
|
%
|
|
Other
|
|
|
122.8
|
|
|
40.5
|
%
|
|
|
|
|
115.2
|
|
|
37.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
599.9
|
|
|
30.0
|
%
|
|
|
|
$
|
620.2
|
|
|
27.2
|
%
|
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|