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Today, on January 12, 2016, GameStop Corp. reported its 2015 holiday sales results.

Grapevine, TX (Jan. 12, 2016)—GameStop Corp. (NYSE: GME), a family of specialty retail brands that makes the most popular technologies affordable and simple, today reported sales results for the nine-week holiday period ended January 2, 2016.

Total global sales for the holiday period increased 1.8% to $2.99 billion (a 5.9% increase in constant currency), compared to the 2014 holiday sales period. Foreign currency exchange rates reduced total sales by $119.5 million.

Total comparable store sales for the holiday period increased 4.4%, growing 4.9% in the U.S. and 3.2% internationally. Global multichannel sales grew 47.4%, driven by ThinkGeek.com sales and gains in our Ship-from-store, Pickup-in-store and Web-in-store initiatives.

Paul Raines, chief executive officer, stated, “We are pleased with our holiday sales performance. Our positive comps were fueled by strong sales of new video game consoles and collectibles. Growth in our diversification efforts, Tech Brands and collectibles, more than offset a decline in new software sales in terms of revenues and gross margin dollars. Based on these results, we are updating our fourth quarter and full year earnings per share guidance. It is exciting to see our transformation strategy paying off with our new businesses meaningfully contributing to the company’s sales and profitability.”

Sales of new hardware increased 4.5% (a 9.2% increase in constant currency), as consumers were motivated by manufacturer promotions for Sony’s PlayStation 4 and Microsoft’s Xbox One.

PlayStation 4 and Xbox One combined new software sales increased 38% compared with the prior year holiday period, in which they grew 94.4%. Despite this growth, new software sales declined 9.7% (a 5.6% decrease in constant currency), primarily due to fewer Nintendo titles available compared to last year and declines in prior gen software sales.

Pre-owned sales declined 0.3%, but increased 2.8% in constant currency (+4.0% in the U.S. and -1.0% internationally). In the U.S., sales of next-gen pre-owned video games increased more than 50% as video game customers found value in the broad assortment of PS4 and Xbox One games available at GameStop and in the exceptional buy-sell-trade promotions offered throughout the season.

Technology Brands revenues expanded by 59.9%, driving a 17.7% increase (an 18.0% increase in constant currency) in the mobile & consumer electronics category. Top sellers included the Apple iPhone 6s, the Apple Watch and Beats headphones. During fiscal 2015, GameStop acquired or opened 550 stores and now operates more than 1,000 Technology Brand stores in the U.S.

Non-GAAP digital receipts increased 9.8% (a 13.8% increase in constant currency) to $325.6 million ($46.1 million of sales on a GAAP basis), and are on track to exceed $1 billion in fiscal 2015. The increase was primarily due to continued growth in DLC and Kongregate.

Sales in the Other category soared 80.4% (an 88.9% increase in constant currency) as the company’s collectibles revenues grew more than 300%, driven by products such as the Funko Mystery Box and the BB-8 App-enabled Droid. In addition, the company now operates 30 “Loot” stores worldwide, including three ThinkGeek stores in the U.S.

Capital Allocation Update
During the holiday period, GameStop repurchased 1.22 million shares of common stock at an average price of $32.90, or $40.1 million worth of stock. As of the end of the holiday period, the company had approximately $255.0 million remaining of its current share repurchase authorization.

Guidance Update
Based on the holiday sales results, GameStop is updating its previously announced fourth quarter and full year earnings per share guidance.

Q4 and FY Financial Guidance:

Q4 Current

Same Store Sales: +2.5% to +4.0%
Earnings Per Share: $2.19 to $2.25

Q4 Former

Same Store Sales: -1.0% to +6.0%
Earnings Per Share: $2.12 to $2.32

Full Year Current

Same Store Sales: +4.0% to +5.0%
Earnings Per Share: $3.69 to $3.75

Full Year Former

Same Store Sales: +2.0% to +6.0%
Earnings Per Share: $3.66 to $3.86

Note: Paul Raines, GameStop’s chief executive officer, will be presenting at the 2016 ICR Conference in Orlando, FL today at 4:00pm ET. The presentation can be accessed through a live audio webcast at http://investor.GameStop.com.

Source: http://www.sec.gov/Archives/edgar/data/1326380/000132638016000233/a991-holidaysales2015.htm

 

[1st Course]

Stock taking a beating currently.

They did ok in hardware and electronics but software was disappointing.