Used Game Sales Propel GameStop to Solid Year, Q4

Almost a quarter of GameStop’s [GME] sales came from used games for the year and Q4, the company said its earnings statement today.

The company raked in an astonishing $2.0 billion in used game sales last year, compared to $1.5 billion in the previous year. The $2 billion represents 23 percent of GameStop’s sales, while the same category made up almost half—48.1 percent—of the company’s profit.

For the year ended January 31, GameStop reported a net income of $398.2 million, or $2.38 per diluted share on revenues of $8.8 billion. That compares to a net income of $288.2 million, or $1.75 per diluted share on revenues of $7 billion the year before.

For the quarter—which included the holiday season—GameStop’s net income was $232.3 million, or $1.39 per diluted share on revenues of $3.4 billion. The company’s net income in the same quarter the previous year was $189.8 million, or $1.14 per diluted share on revenues of $2.8 billion.

“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,” CEO Dan DeMatteo said in a prepared statement.

The company expects this year’s sales to grow between 10 and 12 percent, and its diluted EPS to fall between 18 and 22 percent higher than last year. For the current quarter, GameStop expects results to be flat to a 2 percent growth, due to the fact it’s up against a quarter last year which saw the release of Super Smash Bros. Brawl, Mario Kart Wii, and Grand Theft Auto IV. Still, it is encouraged by the release of major titles like Street Fighter IV, Resident Evil 5 and Halo Wars in Q1 this year.

The company will open 400 stores internationally this year, half of which will be here in the US, GameStop said.

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