GameStop reports record holiday sales

GameStop has reported a 34.7 per cent increase in sales results for the nine-week holiday period ending January 5, 2008.

Total sales for the holiday period were USD 2,334.4 million, up from USD 1,732.8 million during the same period last year.

"Driven by robust domestic and international sales, GameStop achieved the most successful holiday season results ever," said R. Richard Fontaine, GameStop's chairman and CEO.

According to GameStop, the top five videogames sold during the holiday period were Guitar Hero III, Call of Duty 4: Modern Warfare, Assassin's Creed, Rock Band, and Super Mario Galaxy.

"Videogaming is redefining itself and attracting more players than ever as demonstrated by the growing number of Wii parties and Guitar Hero fests held not only at home, but also on college campuses, cruise ships and any place people are having fun," Fontaine said.

GameStop has increased its fourth quarter 2007 diluted earnings per share guidance to be in a range of USD 1.09 to 1.10. Full year earnings per diluted share guidance is now forecast to be in a range of USD 1.75 to 1.76, up USD 0.13 per share higher than prior guidance issued in November.

Despite strong sales and an increase in guidance, shares in GameStop had fallen 5.24 per cent to USD 52.22 at the time of this writing.

Wedbush Morgan Securities analyst Michael Pachter, explaining why he is downgrading GameStop from "buy" to "hold," said that GameStop management has consistently exceeded expectations and will continue to do so in the future.

"We based our downgrade on our honest belief that the market is unprepared to pay premium multiples for retailers, even if those retailers demonstrate phenomenal earnings growth."