GameStop Drives Record Sales and Earnings in 2008

March 26, 2009

Solid Increases in Sales, Operating Margins, EPS, and Cash Generation Expected in 2009

GRAPEVINE, Texas--(BUSINESS WIRE)--Mar. 26, 2009-- GameStop Corp. (NYSE: GME), the world’s largest video game and entertainment software retailer, today reported audited sales and earnings for the fourth quarter and the fiscal year ended January 31, 2009.

Daniel DeMatteo, Chief Executive Officer, stated, “In spite of the current worldwide retail environment, GameStop’s financial performance is being driven by delivering to consumers what they want: stores in a wide range of locations, knowledgeable associates and most importantly, options that provide value. Our affinity with consumers, combined with our solid business model, prudent financial management practices, expansive brand presence and strategic merchandising, allowed us to achieve a record eighth straight year of sales and earnings growth. In 2008, we opened or acquired 1,002 stores worldwide, including the acquisition of Micromania, the largest video game retailer in France.”

Fourth Quarter Financial Results

Net earnings increased 22.4% to $232.3 million in the fourth quarter of 2008, including merger-related income of $12.0 million ($7.5 million, net of tax expense) as compared to net earnings of $189.8 million in the prior year quarter.

Diluted earnings per share were $1.39, at the high end of previously announced guidance, including merger-related income of $0.05 per share, an increase of 21.9% compared to $1.14 in the prior year quarter.

Total sales for the fourth quarter increased 21.9% to $3.5 billion, in comparison to $2.9 billion in the prior year quarter. Comparable store sales increased +9.6% for the fourth quarter.

Full Year Financial Results

Net earnings increased 38.2% to $398.3 million in fiscal 2008, including debt retirement costs and merger-related expenses of $6.9 million (combined $4.4 million, net of tax benefits) as compared to net earnings of $288.3 million in fiscal 2007, including debt retirement costs of $12.6 million ($7.9 million, net of tax benefits).

Diluted earnings per share were $2.38, at the high end of previously announced guidance, including debt retirement costs and merger-related expenses of $0.02 per share, an increase of 36.0% compared to $1.75, including debt retirement costs of $0.05 per share, in fiscal 2007.

Total sales for the full year increased 24.1% to $8.8 billion, in comparison to $7.1 billion in fiscal 2007. Comparable store sales increased +12.3% for the full year.

Business Outlook

“Looking at 2009, we are confident in our ability to increase sales and earnings, generate significant cash, advance market share, and maintain a financially sound balance sheet. We have positioned GameStop to offer video game consumers worldwide the best values for gaming,” concluded DeMatteo.

Based on our expectations of continued proliferation of the hardware installed base, the upcoming new title slate, increasing consumer enthusiasm for our trade-in model, and further expansion of video games as primary, mainstream entertainment, GameStop expects 2009 to be another record year. In spite of the worldwide recession and difficult retail climate, we expect robust increases in sales, operating margins, earnings, and cash generation. As reported on February 19^th, GameStop projects 2009 growth as follows:

Total sales growth between +10.0% and +12.0%
Comparable store sales of +4.0% to +6.0%
Diluted earnings per share increasing +18% to +22%

During the year, we expect to generate free cash flow (a non-GAAP measure of operating cash flow less capital expenditures) of over $500 million, after having invested $170 million in capital improvements, including the opening of more than 400 new stores worldwide.

For the first quarter of fiscal 2009, the company expects comparable store sales to range from flat to +2.0%, on top of the 27% comp store sales increase from the prior year quarter when three major software titles were launched (SUPER SMASH BROS. BRAWL, MARIO KART, and GRAND THEFT AUTO IV). Sales growth will be driven by continued strong demand for all new hardware systems, including Nintendo’s DSi, and a strong slate of new video game releases, including Capcom’s STREET FIGHTER IV and RESIDENT EVIL 5 and Microsoft’s HALO WARS. Diluted earnings per share are expected to range from $0.40 to $0.42, an increase of +5.0% to +10.0% over the prior year quarter. During the course of the year, we expect comparable sales increases to vary by quarter, depending on release dates of new titles, and in consideration of the rollover effect of launch dates of titles in 2008.

For the U.S. market, we estimate that new video game software sales will increase between +5.0% and +10.0% in 2009.

Note that guidance does not include debt retirement costs or merger related expenses.

About GameStop

Headquartered in Grapevine, TX, GameStop Corp., a Fortune 500 and S&P 500 company, is the world's largest video game and entertainment software retailer. The company operates 6,207 retail stores in 17 countries worldwide. The company also operates an e-commerce site, GameStop.com, and publishes Game Informer(R) magazine, a leading multi-platform video game publication. GameStop Corp. sells new and used video game software, hardware and accessories for video game systems from Sony, Nintendo, and Microsoft. In addition, the company sells PC entertainment software, related accessories and other merchandise. General information on GameStop Corp. can be obtained at the company's corporate website: http://www.gamestopcorp.com.

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 fiscal 2009 and beyond, 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 Nintendo's Wii; the timing of release of video game titles for next generation consoles; the risks associated with expanded international operations and the integration of recent acquisitions, including Micromania; the impact of increased competition and changing technology in the video game industry; and economic and other events that could reduce or impact consumer demand. 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 February 2, 2008 filed with the SEC and available at the SEC's Internet site at http://www.sec.gov or http://investor.gamestop.com.

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

	13 weeks			13 weeks
	ended			ended
	Jan. 31, 2009			Feb. 2, 2008

Sales	$	3,492,114		$	2,865,585
Cost of sales		2,652,937			2,181,510

Gross profit		839,177			684,075

Selling, general and administrative
expenses		433,285			357,512
Depreciation and amortization		38,092			33,412
Merger-related expenses (income)		(12,012	)		-

Operating earnings		379,812			293,151

Interest expense, net		12,331			8,390

Earnings before income
tax expense		367,481			284,761

Income tax expense		135,156			94,960

Net earnings	$	232,325		$	189,801

Earnings per common share:
Basic	$	1.42		$	1.18
Diluted	$	1.39		$	1.14

Weighted average common shares
outstanding:
Basic		163,812			160,980
Diluted		167,244			166,992



Percentage of Sales:

Sales		100.0	%		100.0	%
Cost of sales		76.0	%		76.1	%

Gross profit		24.0	%		23.9	%

SG&A expenses		12.4	%		12.5	%
Depreciation and amortization		1.1	%		1.2	%
Merger-related expenses (income)		-0.4	%		0.0	%

Operating earnings		10.9	%		10.2	%

Interest expense, net		0.4	%		0.3	%

Earnings before income
tax expense		10.5	%		9.9	%

Income tax expense		3.8	%		3.3	%

Net earnings		6.7	%		6.6	%

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

	52 weeks			52 weeks
	ended			ended
	Jan. 31, 2009			Feb. 2, 2008

Sales	$	8,805,897		$	7,093,962
Cost of sales		6,535,762			5,280,255

Gross profit		2,270,135			1,813,707

Selling, general and administrative
expenses		1,445,419			1,182,016
Depreciation and amortization		145,004			130,270
Merger-related expenses		4,593			-

Operating earnings		675,119			501,421

Interest expense, net		38,837			47,774
Debt extinguishment expense		2,331			12,591

Earnings before income
tax expense		633,951			441,056

Income tax expense		235,669			152,765

Net earnings	$	398,282		$	288,291

Earnings per common share:
Basic	$	2.44		$	1.82
Diluted	$	2.38		$	1.75

Weighted average common shares
outstanding:
Basic		163,190			158,226
Diluted		167,671			164,844



Percentage of Sales:

Sales		100.0	%		100.0	%
Cost of sales		74.2	%		74.4	%

Gross profit		25.8	%		25.6	%

SG&A expenses		16.4	%		16.7	%
Depreciation and amortization		1.6	%		1.8	%
Merger-related expenses		0.1	%		0.0	%

Operating earnings		7.7	%		7.1	%

Interest expense, net		0.5	%		0.7	%
Debt extinguishment expense		0.0	%		0.2	%

Earnings before income
tax expense		7.2	%		6.2	%

Income tax expense		2.7	%		2.1	%

Net earnings		4.5	%		4.1	%

GameStop Corp.
Balance Sheets
(in thousands, except per share data)

	Jan. 31,			Feb. 2,
	2009			2008
ASSETS:
Current assets:
Cash and cash equivalents	$	578,141		$	857,414
Receivables, net		65,981			56,019
Merchandise inventories		1,075,792			801,025
Prepaid expenses and other current assets		74,512			52,778
Deferred taxes		23,615			27,481
Total current assets		1,818,041			1,794,717

Property and equipment:
Land		10,397			11,870
Buildings & leasehold improvements		454,651			378,611
Fixtures and equipment		619,845			538,738
		1,084,893			929,219
Less accumulated depreciation and amortization		535,639			417,550
Net property and equipment		549,254			511,669

Goodwill, net		1,862,107			1,402,440
Other noncurrent assets		283,188			67,065
Total assets	$	4,512,590		$	3,775,891


LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable	$	1,047,963		$	844,376
Accrued liabilities		514,748			416,181
Total current liabilities		1,562,711			1,260,557


Other long-term liabilities		104,486			78,415
Senior fixed notes payable, net of discount		545,712			574,473
Total liabilities		2,212,909			1,913,445

Stockholders' equity:
Preferred stock - authorized 5,000 shares; no shares
issued or outstanding		--			--
Class A common stock - $.001 par value; authorized 300,000 shares;
163,843 and 161,007 shares issued and outstanding, respectively		164			161
Additional paid-in-capital		1,307,453			1,208,474
Accumulated other comprehensive income (loss)		(28,426	)		31,603
Retained earnings		1,020,490			622,208
Total stockholders' equity		2,299,681			1,862,446
Total liabilities and stockholders' equity	$	4,512,590		$	3,775,891

Schedule I
GameStop Corp.
Sales Mix


	13 Weeks Ended				13 Weeks Ended
	Jan. 31, 2009				Feb. 2, 2008
			Percent				Percent
	Sales		of Total		Sales		of Total
Sales (in millions):

New video game hardware	$	813.1	23.3	%	$	719.8	25.1	%
New video game software		1,483.9	42.5	%		1,209.0	42.2	%
Used video game products		714.2	20.5	%		546.7	19.1	%
Other		480.9	13.7	%		390.1	13.6	%

Total	$	3,492.1	100.0	%	$	2,865.6	100.0	%



	52 Weeks Ended				52 Weeks Ended
	Jan. 31, 2009				Feb. 2, 2008
			Percent				Percent
	Sales		of Total		Sales		of Total
Sales (in millions):

New video game hardware	$	1,860.2	21.1	%	$	1,668.9	23.5	%
New video game software		3,685.0	41.9	%		2,800.7	39.5	%
Used video game products		2,026.6	23.0	%		1,586.7	22.4	%
Other		1,234.1	14.0	%		1,037.7	14.6	%

Total	$	8,805.9	100.0	%	$	7,094.0	100.0	%

Schedule II
GameStop Corp.
Gross Profit Mix


	13 Weeks Ended				13 Weeks Ended
	Jan. 31, 2009				Feb. 2, 2008
			Gross				Gross
	Gross		Profit		Gross		Profit
	Profit		Percent		Profit		Percent

Gross Profit (in millions):

New video game hardware	$	44.2	5.4	%	$	37.6	5.2	%
New video game software		308.0	20.8	%		257.6	21.3	%
Used video game products		331.5	46.4	%		262.2	48.0	%
Other		155.5	32.3	%		126.7	32.5	%

Total	$	839.2	24.0	%	$	684.1	23.9	%


	52 Weeks Ended				52 Weeks Ended
	Jan. 31, 2009				Feb. 2, 2008
			Gross				Gross
	Gross		Profit		Gross		Profit
	Profit		Percent		Profit		Percent

Gross Profit (in millions):

New video game hardware	$	112.6	6.1	%	$	108.2	6.5	%
New video game software		768.4	20.9	%		581.7	20.8	%
Used video game products		974.5	48.1	%		772.2	48.7	%
Other		414.6	33.6	%		351.6	33.9	%

Total	$	2,270.1	25.8	%	$	1,813.7	25.6	%

Source: GameStop Corp.

Media Contact:
Chris Olivera
Vice President,
Corporate Communications
GameStop Corp.
(817) 424-2130
or
Investor Contact:
Matt Hodges
Director,
Investor Relations
GameStop Corp.
(817) 424-2130