GameStop Reports Sales and Earnings for Fiscal 2013 and Provides 2014 Outlook

Gamestop Corp. (NYSE: GME) reported financial results for the fourth quarter and fiscal year ended Feb. 1, 2014.

Paul Raines, chief executive officer, stated, "The launch of new consoles in 2013 marked the return of innovation to the video game category and GameStop's market share increased to an all-time high. Our emerging digital and mobile businesses, which did not exist three years ago, surpassed $1 billion of revenue. As we push forward into 2014, both the re-energized video game category and our new Technology Brands business unit provide us with solid growth opportunities in the consumer electronics and wireless markets.”

Total global sales for the 13-week fourth quarter of 2013 were $3.68 billion, a 3.4% increase compared to the 14-week prior year quarter. Comparable store sales increased 7.8%. The growth in sales and comps was driven by the successful launches of Microsoft’s Xbox One and Sony’s PlayStation 4.

Fourth quarter net earnings were $220.5 million, including goodwill and asset impairment charges, compared to net earnings of $261.1 million in Q4 2012. Diluted earnings per share were $1.89 compared to diluted earnings per share of $2.15.

Fourth quarter net earnings included goodwill and asset impairment charges of $28.7 million ($22.8 million, net of tax benefits), primarily due to the closure of Spawn Labs. The company also recorded a non-recurring benefit of $33.6 million ($20.9 million after tax) from a change in accounting estimates primarily related to customer liabilities. A full reconciliation of non-GAAP adjusted net income to GAAP net income can be accessed at http://investor.GameStop.com/.

For fiscal year 2013, total global sales were $9.04 billion, a 1.7% increase compared to fiscal 2012. Comparable store sales increased 3.8% compared to fiscal 2012, primarily driven by a 29.7% increase in new video game hardware sales related to the launches of Microsoft’s Xbox One and Sony’s PlayStation 4.

New video game software and pre-owned and value products sales declined 2.8% and 4.1%, respectively. Digital receipts increased 15.1% to $724.4 million, or $217.7 million of GAAP sales. Mobile and consumer electronics sales, which include Technology Brands revenues, increased 51.6% over 2012.

Fiscal 2013 net earnings were $354.2 million, including the aforementioned charges and non-recurring benefit, compared to a net loss of $269.7 million, including restructuring, impairment and debt retirement expenses of $680.7 million ($672.7 million, net of tax benefit), in fiscal 2012. Diluted earnings per share were $2.99 compared to a loss per share of $2.13 in fiscal 2012.

During the fourth quarter of 2013, the company repurchased $49.5 million of stock. For fiscal 2013, the company repurchased $258.3 million of stock. The company paid out $131 million in dividends during fiscal 2013.

For fiscal 2014, GameStop has repurchased $20.6 million worth of stock.

GameStop is providing the following financial guidance for fiscal 2014:

In 2014, GameStop expects to reduce its video game store count by approximately 2%.

Note: The guidance only includes the effect of the shares purchased fiscal year-to-date from the existing $500 million share repurchase plan and is based on the fiscal 2014 forecasted weighted average shares outstanding of 117,000,000.

The full release, including financial statements, can be accessed at http://investor.GameStop.com/.