GameStop Corp. Total Sales Increase 21% in 2002; Comparable Sales Up 11% for 2002; Fourth Quarter 2002 EPS At High End Of Guidance; EPS Projected to Grow 17% to 22% in 2003
GameStop Corp. sales were $1,352.8 million for fiscal 2002, an increase of 20.7% over fiscal 2001 sales of $1,121.1 million. On a comparable store basis, sales increased 11.4% during fiscal 2002. For the fourth quarter ended February 1, 2003, total sales increased 1.2% to $520.4 million, in comparison to $514.2 million in the prior year quarter. Comparable store sales decreased 7.4% during the quarter; yet, total video game software sales increased 24% for the quarter and 41% for the full year.
"In the face of a weak economy and a short Christmas selling season, GameStop continued to gain market share through the holiday period," said R. Richard Fontaine, Chairman & Chief Executive Officer. "We are particularly pleased with the growth of our video game software share, and with the strong performance of the 210 stores opened throughout the year. GameStop's marketing strategy of offering both new and used products has lowered the out-of-pocket cost for video game product and is a more compelling value proposition for gamers in a tight economy. While we did not achieve our aggressive goal of surpassing last year's 59% comparable store sales in the fourth quarter, we remain very positive about the growth of the video game business and our position within the industry. As such, we will be continuing our very aggressive expansion of stores throughout the United States in 2003."
Based on increased margin rates and tight expense controls, and subject to a year-end audit, the company expects earnings per share for the fourth quarter of fiscal 2002 to be $0.52 per share, at the high end of revised guidance of December 18, 2002. Full year 2002 earnings per share are expected to be $0.87 per share, which is well within our original earnings forecast issued at the beginning of the year.
Fiscal year-end earnings results are expected to be released on March 19, 2003.
Guidance for Fiscal 2003
For the fiscal year ending January 31, 2004, the company currently expects total revenues to increase 14% to 16%, with corresponding comparable store sales increases of 4% to 6%. Earnings per share are expected to range from $1.02 to $1.06 per share, which represents EPS growth of 17% to 22%.
For the first quarter of fiscal 2003, the company expects comparable store sales to increase between 5% and 7%, while earnings per share are expected to range from $0.10 to $0.11 per share, as compared to pro-forma earnings per share of $0.09 in the prior-year quarter, when considering an adjustment for excluding interest of $0.9 million on debt repaid with GameStop's initial public offering.
At this time, we will not be forecasting quarterly revenues or earnings beyond the first quarter, as major title releases are only partially known, and the specific months of release are very general. In addition, while we expect hardware price reductions during the year, the timing and amount are, at this time, unclear.
A conference call with GameStop Corp.'s management will be simulcast on the Web at (http://www.gamestop.com) beginning at 11:00 AM ET on February 18, 2003, and will be accessible at (http://www.gamestop.com/investor-relations), where it will be archived until March 4, 2003.
About GameStop Corp.
Headquartered in Grapevine, Texas, GameStop Corp. (NYSE:GME) is the nation's largest video game and entertainment software specialty retailer. The company operates 1,231 retail stores throughout 49 states and Puerto Rico, under the GameStop(R), Babbage's(R), Software Etc.(TM) and FuncoLand(R) brands. In addition, the company owns a commerce-enabled Web property, GameStop.com, and Game Informer 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 any 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. 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.
Retail Sales Mix
52 weeks 52 weeks
Ended Ended
February 1, February 2,
2003 2002
----------- -----------
Video Game Hardware 19% 25%
Video Game Software 58% 48%
Video Game Accessories 12% 12%
PC Software 7% 10%
PC Accessories and Other 4% 5%
13 weeks 13 weeks
Ended Ended
February 1, February 2,
2003 2002
------------ -----------
Video Game Hardware 19% 29%
Video Game Software 59% 48%
Video Game Accessories 13% 13%
PC Software 5% 7%
PC Accessories and Other 4% 3%
CONTACT: GameStop Corp.
Media Contact:
Lori M. Milovich
Director, Public & Investor Relations
817/424-2130
or
Investor Contact:
David W. Carlson
Executive Vice President & Chief Financial Officer
817/424-2130
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