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GameStop Corp. Sales Up 14%; Third Quarter 2003 EPS of $0.18 at High End of Guidance; Video Game Software Sales Increase 18%; GameStop Opens 83 New Stores in Third Quarter

GRAPEVINE, Texas--(BUSINESS WIRE)--Nov. 19, 2003--GameStop Corp. (NYSE:GME), the nation's largest video game and entertainment software specialty retailer, today reported sales and earnings for the third quarter ended November 1, 2003.

GameStop sales increased 14% to $326.0 million in the third quarter of 2003, compared with $286.7 million in the prior year quarter. Both new and used video game software sales were very strong, growing by 18%, with strong performances from new titles such as "Soul Calibur II" from Namco, "Madden NFL 2004" and "NBA Live 2004" from Electronic Arts Inc., and "WWE Smackdown: Here Comes The Pain" from THQ, Inc.

Comparable store sales declined by 1.9% during the third quarter compared to last year's third quarter, which had comparable store sales of 30.3% that were fueled by the release of "Grand Theft Auto: Vice City," the best selling video game ever. Net earnings for the third quarter increased 9% to $10.7 million, or $0.18 per diluted share, at the high end of our previously issued guidance, compared with net earnings of $9.8 million, or $0.16 per diluted share, in the prior year quarter.

New store sales performance in stores opened over the last 24 months continued to be strong, exceeding expectations, including the 83 stores opened during this quarter, and was a significant contributor to the overall sales growth of 14%.

"I am particularly happy with our third quarter performance in that virtually all elements of our business came together as planned. Our new title software sales were strong, our used sales benefited from a better inventory position in the quarter, the early stages of our holiday re-merchandising efforts have improved our customer's shopping experience at many of our stores, and our gross margin was very strong," said R. Richard Fontaine, Chairman and CEO. "In addition, our new store performance and effectiveness in site selection have come together so well that we will exceed our original store count for the year, and should finish the year with 300 new stores. We are very well positioned to continue this momentum into the holiday season."

Guidance for the fourth quarter assumes comparable store sales ranging from -2.0% to +2.0%, with earnings per diluted share between $0.62 and $0.66. We continue to believe that full-year 2003 earnings per diluted share will range from $1.02 to $1.06.

During the first quarter of fiscal 2003, GameStop implemented FASB Emerging Issues Task Force Issue 02-16 (EITF 02-16), which deals with the accounting for vendor rebates, advertising allowances, and other cash consideration received from vendors. EITF 02-16 stipulates that cash consideration received from a vendor should be presumed to be a reduction of the prices of vendors' products and should, therefore, be shown as a reduction in the cost of sales when recognized in the reseller's statements of operations. The only exceptions to this rule are if the vendor receives an identifiable benefit or if the reimbursement is for specific, incremental, identifiable costs. If the amount of cash consideration received exceeds the cost being reimbursed, that excess amount should be characterized as a reduction of cost of sales when recognized in the reseller's statements of operations. This new standard is effective prospectively for new arrangements, including modifications of existing arrangements, entered into after December 31, 2002. We expect that the implementation of EITF 02-16 will reduce fiscal 2003 net earnings by approximately $0.03 per diluted share due to the deferral of vendor allowances reported as a reduction in merchandise inventories. As of November 1, 2003, approximately $2.2 million in vendor allowances have been deferred and will be recognized in cost of sales as the inventory is sold. EITF 02-16 also requires the reclassification of a portion of GameStop's vendor allowances earned in fiscal 2003 from selling, general and administrative expense to cost of goods sold. In Schedules I and II, we have presented both this year's and last year's third quarter and year to date results on a pro forma basis as if EITF 02-16 had been implemented prior to the beginning of fiscal 2002.

A conference call with GameStop Corp.'s management will be simulcast on the Web at (http://www.gamestop.com) beginning at 5:00 PM ET on November 19, 2003, and will be accessible at (http://www.gamestop.com/investor-relations), where it will be archived until December 3, 2003.

About GameStop Corp.

Headquartered in Grapevine, TX, GameStop Corp. (NYSE: GME) is the nation's largest video game and entertainment software specialty retailer. The company operates 1,472 retail stores throughout 49 states, Puerto Rico and Ireland, primarily under the GameStop(R) brand. In addition, the company owns a commerce-enabled Web property, GameStop.com, and Game Informer(R) magazine, a leading video and computer game publication.

GameStop Corp. sells the most popular new software, hardware and game accessories for the PC and next generation video game systems from Sony, Nintendo, and Microsoft, and is also the industry's largest reseller of used video games. In addition, the company sells computer and video game magazines and strategy guides, action figures, and other related merchandise to more than 30 million customers.

Barnes and Noble, Inc. (NYSE: BKS), the world's largest bookseller, has approximately a 60 percent interest in GameStop. General information on GameStop Corp. can be obtained via the Internet by visiting the company's corporate Website: http://www.gamestop.com/investor-relations/.

SAFE HARBOR

This press release (including the attached schedules) contains "forward-looking statements." GameStop Corp. is including this statement for the express purpose of availing itself of the protections of the safe harbor provided by the Private Securities Litigation Reform Act of 1995 with respect to all such forward-looking statements. These forward-looking statements are based on currently available information and represent the beliefs of the management of the company. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks include, but are not limited to, general economic and market conditions, seasonality, decreased consumer demand for the company's products, possible disruptions in the company's computer or telephone systems, possible work stoppages or increases in labor costs, possible increases in shipping rates or interruptions in shipping service, effects of competition, possible disruptions or delays in the opening of new stores or the inability to obtain suitable sites for new stores, higher than anticipated store closing or relocation costs, higher interest rates, the performance of the company's online and other initiatives, the successful integration of acquired businesses, unanticipated increases in merchandise or occupancy costs, unanticipated adverse litigation results or effects, product shortages, and other factors which may be outside of the company's control. In addition, the video game industry has historically been cyclical in nature and dependent upon the introduction of new generation systems and related interactive software. Please refer to the company's reports on file with the SEC for a more detailed discussion of these and other risks that could cause results to differ materially.

                            GameStop Corp.
                       Statements of Operations
                 (in thousands, except per share data)

                                      13 weeks           13 weeks
                                        ended             ended
                                  November 1, 2003   November 2, 2002
                                  ----------------- ------------------

Sales                             $        326,042  $         286,728
Cost of sales                              227,568            212,883
                                  ----------------- ------------------

   Gross profit                             98,474             73,845

Selling, general and
 administrative expenses                    72,865             52,001
Depreciation and amortization                7,718              5,862
                                  ----------------- ------------------

Operating earnings                          17,891             15,982

Interest expense (income), net                 (62)              (380)
                                  ----------------- ------------------

Earnings before income
  tax expense                               17,953             16,362

Income tax expense                           7,260              6,577
                                  ----------------- ------------------

Net earnings                      $         10,693  $           9,785
                                  ================= ==================

Earnings per common share:
     Basic                        $           0.19  $            0.17
     Diluted                      $           0.18  $            0.16

Weighted average common shares
  outstanding:
     Basic                                  55,767             56,931
     Diluted                                59,431             61,111
Percentage of sales:
--------------------

Sales                                        100.0%             100.0%
Cost of sales                                 69.8%              74.2%
                                  ----------------- ------------------

Gross profit                                  30.2%              25.8%

SG&A expenses                                 22.3%              18.2%
Depreciation and amortization                  2.4%               2.0%
                                  ----------------- ------------------

Operating earnings                             5.5%               5.6%

Interest expense (income), net                   -              (0.1)%
                                  ----------------- ------------------

Earnings before income
     tax expense                               5.5%               5.7%

Income tax expense                             2.2%               2.3%
                                  ----------------- ------------------

Net earnings                                   3.3%               3.4%
                                  ================= ==================
                            GameStop Corp.
                       Statements of Operations
                 (in thousands, except per share data)

                                       39 weeks           39 weeks
                                        ended              ended
                                   November 1, 2003   November 2, 2002
                                  ----------------- ------------------

Sales                             $        953,457  $         832,395
Cost of sales                              680,559            616,014
                                  ----------------- ------------------

   Gross profit                            272,898            216,381

Selling, general and
 administrative expenses                   212,662            165,217
Depreciation and amortization               20,807             16,605
                                  ----------------- ------------------

Operating earnings                          39,429             34,559

Interest expense (income), net                (648)              (255)
                                  ----------------- ------------------

Earnings before income
  tax expense                               40,077             34,814

Income tax expense                          16,167             13,997
                                  ----------------- ------------------

Net earnings                      $         23,910  $          20,817
                                  ================= ==================

Earnings per common share:
     Basic                        $           0.42  $            0.37
     Diluted                      $           0.40  $            0.34

Weighted average common shares
  outstanding:
     Basic                                  56,538             56,039
     Diluted                                59,953             60,372
Percentage of sales:
--------------------

Sales                                       100.0%              100.0%
Cost of sales                                71.4%               74.0%
                                  ----------------  ------------------

Gross profit                                 28.6%               26.0%

SG&A expenses                                22.3%               19.9%
Depreciation and amortization                 2.2%                2.0%
                                  ----------------  ------------------

Operating earnings                            4.1%                4.1%

Interest expense (income), net              (0.1)%              (0.1)%
                                  ----------------  ------------------

Earnings before income
  tax expense                                 4.2%                4.2%

Income tax expense                            1.7%                1.7%
                                  ----------------  ------------------

Net earnings                                  2.5%                2.5%
                                  ================  ==================
                            GameStop Corp.
                            Balance Sheets
                 (in thousands, except per share data)


                                  November 1, 2003   November 2, 2002
                                  ----------------  ------------------
ASSETS:
Current assets:
  Cash and cash equivalents       $        91,577   $         125,121
  Receivables, net                          8,013               7,461
  Merchandise inventories                 309,691             268,393
  Prepaid expenses and other
   current assets                          10,964               8,976
  Prepaid taxes                            16,798                   -
  Deferred taxes                            6,034               3,418
                                  ----------------  ------------------
     Total current assets                 443,077             413,369
                                  ----------------  ------------------

Property and equipment:
  Leasehold improvements                   52,287              36,413
  Fixtures and equipment                  124,498              77,590
                                  ----------------  ------------------
                                          176,785             114,003
  Less accumulated depreciation
   and amortization                        76,067              49,854
                                  ----------------  ------------------
     Net property and equipment           100,718              64,149
                                  ----------------  ------------------

Goodwill, net                             320,826             317,957
Other noncurrent assets                     1,401               1,148
                                  ----------------  ------------------
     Total assets                 $       866,022   $         796,623
                                  ================  ==================


LIABILITIES AND STOCKHOLDERS'
 EQUITY:
Current liabilities:
  Accounts payable                $       239,184   $         209,491
  Accrued liabilities                      75,334              66,388
                                  ----------------  ------------------
     Total current liabilities            314,518             275,879

Deferred taxes                              5,574               3,065
Other long-term liabilities                 3,314               2,777
                                  ----------------  ------------------
     Total liabilities                    323,406             281,721
                                  ----------------  ------------------
Stockholders' equity:
  Preferred stock - authorized
    5,000 shares; no shares
    issued or outstanding                       -                   -
  Class A common stock - $.001
    par value; authorized
    300,000 shares; 21,674 and
    20,971 shares issued and
    outstanding, respectively                  22                  21
  Class B common stock - $.001
    par value; authorized
    100,000 shares; 36,009 shares
    issued and outstanding                     36                  36
  Additional paid-in-capital              499,059             491,812
  Accumulated other comprehensive
    loss                                      (25)                  -
  Retained earnings                        78,530              23,033
  Treasury stock, at cost, 2,304
    and 0 shares, respectively            (35,006)                  -
                                  ----------------  ------------------
   Total stockholders' equity             542,616             514,902
                                  ----------------  ------------------
   Total liabilities and
    stockholders' equity          $       866,022   $         796,623
                                  ================  ==================
                              Schedule I
                            GameStop Corp.
                   Pro-Forma Statement of Operations
                 (in thousands, except per share data)


                                       13 weeks          13 weeks
                                        ended             ended
                                   November 1, 2003   November 2, 2002
                                  ----------------- ------------------

Sales                             $        326,042  $         286,728
Cost of sales (1)                          226,401            201,856
                                  ----------------- ------------------

   Gross profit                             99,641             84,872

Selling, general and
 administrative expenses (1)                72,865             63,158
Depreciation and amortization                7,718              5,862
                                  ----------------- ------------------

Operating earnings                          19,058             15,852

Interest expense (income), net                 (62)              (380)
                                  ----------------- ------------------

Earnings before income
  tax expense                               19,120             16,232

Income tax expense                           7,687              6,525
                                  ----------------- ------------------

Net earnings                      $         11,433  $           9,707
                                  ================= ==================

Net earnings per common share:
     Basic                        $           0.21  $            0.17
     Diluted                      $           0.19  $            0.16

Weighted average common shares
  outstanding:
     Basic                                  55,767             56,931
     Diluted                                59,431             61,111



Percentage of sales:
--------------------

Sales                                        100.0%             100.0%
Cost of sales                                 69.4%              70.4%
                                  ----------------- ------------------

Gross profit                                  30.6%              29.6%

SG&A expenses                                 22.4%              22.0%
Depreciation and amortization                  2.4%               2.0%
                                  ----------------- ------------------

Operating earnings                             5.8%               5.6%

Interest expense (income), net                   -              (0.1)%
                                  ----------------- ------------------

Earnings before income
  tax expense                                  5.8%               5.7%

Income tax expense                             2.3%               2.3%
                                  ----------------- ------------------

Net earnings                                   3.5%               3.4%
                                  ================= ==================


Footnote to Schedule I:

    (1) If GameStop had implemented EITF 02-16 prior to the beginning
        of fiscal 2002, vendor allowances in excess of reimbursement
        for specific, incremental, identifiable costs would have
        equated to $11,157 for the 13 weeks ended November 2, 2002.
        GameStop would have recognized vendor allowances as a
        reduction in cost of sales aggregating $1,167 during the 13
        weeks ended November 1, 2003. GameStop would have deferred
        vendor allowances aggregating $130 as a reduction in
        merchandise inventories during the 13 weeks ended November 2,
        2002.
                              Schedule II
                            GameStop Corp.
                   Pro-Forma Statement of Operations
                 (in thousands, except per share data)


                                       39 weeks           39 weeks
                                        ended              ended
                                   November 1, 2003  November 2, 2002
                                  ----------------- ------------------

Sales                             $        953,457  $         832,395
Cost of sales (1)                          677,858            597,339
                                  ----------------- ------------------

   Gross profit                            275,599            235,056

Selling, general and
 administrative expenses (1)               212,662            184,151
Depreciation and amortization               20,807             16,605
                                  ----------------- ------------------

Operating earnings                          42,130             34,300

Interest expense (income), net                (648)              (255)
                                  ----------------- ------------------

Earnings before income
  tax expense                               42,778             34,555

Income tax expense                          17,197             13,891
                                  ----------------- ------------------

Net earnings                      $         25,581  $          20,664
                                  ================= ==================

Net earnings per common share:
     Basic                        $           0.45  $            0.37
     Diluted                      $           0.43  $            0.34

Weighted average common shares
  outstanding:
     Basic                                  56,538             56,039
     Diluted                                59,953             60,372
Percentage of sales:
--------------------

Sales                                        100.0%             100.0%
Cost of sales                                 71.1%              71.8%
                                  ----------------- ------------------

Gross profit                                  28.9%              28.2%

SG&A expenses                                 22.3%              22.1%
Depreciation and amortization                  2.2%               2.0%
                                  ----------------- ------------------

Operating earnings                             4.4%               4.1%

Interest expense (income), net               (0.1%)             (0.1%)
                                  ----------------- ------------------

Earnings before income
  tax expense                                  4.5%               4.2%

Income tax expense                             1.8%               1.7%
                                  ----------------- ------------------

Net earnings                                   2.7%               2.5%
                                  ================= ==================


Footnote to Schedule II:

    (1) If GameStop had implemented EITF 02-16 prior to the beginning
        of fiscal 2002, vendor allowances in excess of reimbursement
        for specific, incremental, identifiable costs would have
        equated to $18,934 for the 39 weeks ended November 2, 2002.
        GameStop would have recognized vendor allowances as a
        reduction in cost of sales aggregating $2,701 during the 39
        weeks ended November 1, 2003. GameStop would have deferred
        vendor allowances aggregating $259 as a reduction in
        merchandise inventories during the 39 weeks ended November 2,
        2002.
                             Schedule III
                            GameStop Corp.
                           Retail Sales Mix

                                      13 weeks           13 weeks
                                        ended              ended
                                  November 1, 2003   November 2, 2002
                                  ----------------- ------------------

Video Game Hardware                             15%                15%
Video Game Software                             64%                61%
Video Game Accessories                          11%                12%
PC Software                                      7%                 7%
PC Accessories and Other                         3%                 5%

    CONTACT: GameStop Corp.
             Media Contact
             Director, Public & Investor Relations
             Lori M. Milovich, 817-424-2130
                 or
             GameStop Corp.
             Investor Contact
             Executive Vice President & Chief Financial Officer
             David W. Carlson, 817-424-2130

    SOURCE: GameStop Corp.