GameStop takes a haircut in Q2 2009
It’s not a good day for retailer GameStop, who reported a decline in profits for the second quarter ended August 1, 2009. GameStop’s sales for the quarter were $1.74 billion, down 3.7 percent compared to sales of $1.80 billion in the same period a year ago. The drop in profits can be attributed to less consumer spending on video games and hardware - lower console sales, a lack of strong new software titles and customer caution due to the U.S. economy.
The top five selling games during the quarter were THQ’s UFC 2009 Undisputed, Activision’s Prototype, EA’s Fight Night Round 4 and NCAA Football 2010, and Atari’s Ghostbusters.
Looking ahead, GameStop expects to record lower profits, mainly due to many games being pushed to 2010 like Bioshock 2, StarCraft II and Splinter Cell: Conviction.
For the third quarter of fiscal 2009, GameStop is forecasting diluted earnings per share to range from $0.27 to $0.33, and for the fourth quarter diluted earnings per share from $1.47 to $1.65. For fiscal 2009, GameStop is lowering diluted earnings per share guidance from the previous range of $2.83 to $2.93 to a range of $2.40 to $2.64.
