GameStop Reports 2016 Holiday Sales Results
January 13 2017 - 07:30AM
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
December 31, 2016.
Total global sales for the holiday period were $2.50 billion, a
16.4% decline compared to the 2015 holiday sales period. Total
comparable store sales decreased 18.7%. Comp trends improved
from November to December (-26.6% in Nov. and -13.0% in Dec.) and
are expected to continue to improve in January. November’s comp was
significantly impacted by weak Call of Duty: Infinite Warfare and
Titanfall 2 sales and aggressive console promotions on Thanksgiving
Day and Black Friday.
Paul Raines, chief executive officer, stated, “During the
holiday period, sales in the video game segment were impacted by
industry weakness, promotional pricing pressure and lower in-store
traffic, amidst a difficult holiday season for many retailers. We
are disappointed with our overall results, but looking broadly, we
did see continued growth in our non-physical gaming businesses and
we expect this category to approach 40% of our earnings in fiscal
2016. As we look forward to 2017, we remain focused on our
transformation plan, which includes growing our non-gaming
businesses, right-sizing our global store portfolio by continuously
evaluating non-productive stores for closure, and maintaining
strong financial discipline, including reducing SG&A by $100
million by 2019.”
Gaming Business Update
- New hardware sales decreased 30.3% as strong sales of recently
released new hardware, such as the Nintendo NES Classic, were
offset by a greater-than-expected decline in PlayStation 4 and Xbox
One hardware sales.
- Sales of new video game software decreased 22.8% due to
difficult comparisons to titles launched a year ago, lower average
selling prices and decreased store traffic.
- Pre-owned sales outpaced new software sales, but declined 7.9%
compared to holiday 2015.
- GameStop’s PowerUp Rewards loyalty program grew 10% over the
last twelve months surpassing 51 million members worldwide.
- Based on the data released by NPD, the company calculated that
it lost market share in November and to a lesser degree in
December. GameStop maintained its overweight share on new titles
launched, but less overall sales of new games led to a mix shift to
catalog and a slight decline in total market share.
Non-Physical Gaming Business Update
- Non-GAAP digital receipts decreased 9.2% to $295.5 million, or
$42.5 million of sales on a GAAP basis, primarily as a result of
the decline in new console software sales.
- Driven by an assortment of Pokémon products, Collectibles sales
increased 27.1% to $176.9 million, with year-to-date sales reaching
our guidance of $450 to $500 million.
- Technology Brands revenues, which are not included in
comparable store sales, expanded by 44.0% to $192.4 million, driven
by store growth and strong sales of the iPhone 6s, iPhone 7 and
Samsung Galaxy S7.
Capital Allocation Update During the holiday
period, GameStop repurchased 755,400 shares of common stock at an
average price of $22.63, or $17.1 million worth of stock.
Year-to-date, the company has repurchased 2.1 million shares at an
average price of $25.19, or $53.1 million worth of stock. As of the
end of the holiday period, there was approximately $192.2 million
remaining of the current share repurchase authorization. The
company intends to repurchase $75 million of stock in fiscal
2016.
Guidance UpdateGameStop is reiterating its
previously announced fourth quarter and full-year 2016 earnings per
share guidance of $2.23 to $2.38 and $3.65 to $3.80, respectively,
excluding any year-end impairments and store closing charges,
based on a favorable fourth quarter tax rate of between 32.5% and
34.5% compared to the initially forecasted rate of 36.0%.
Comparable store sales for the fourth quarter are now expected to
be in a range of -18.0% to -16.0% and -12.0 to -10.0% for the
fiscal year.
About GameStopGameStop Corp. (NYSE:GME), a
Fortune 500 company headquartered in Grapevine, Texas, is a global,
multichannel video game, consumer electronics and wireless services
retailer. GameStop operates more than 7,600 stores across 14
countries. The company’s consumer product network also includes
www.gamestop.com; www.Kongregate.com, a leading browser-based
game site; Game Informer® magazine, the world’s leading print and
digital video game publication; and ThinkGeek, www.thinkgeek.com,
the premier retailer for the global geek community featuring
exclusive and unique video game and pop culture products. In
addition, our Technology Brands segment includes Simply Mac and
Spring Mobile stores. Simply Mac, www.simplymac.com, operates 70
stores, selling the full line of Apple products, including laptops,
tablets, and smartphones and offering Apple certified warranty and
repair services. Spring Mobile, http://springmobile.com, sells
post-paid AT&T services and wireless products through its 1,436
AT&T branded stores and offers pre-paid wireless services,
devices and related accessories through its 68 Cricket branded
stores in select markets in the U.S.
General information about GameStop Corp. can be obtained at the
company's corporate website. Follow GameStop on Twitter @
www.twitter.com/GameStop and find GameStop on Facebook @
www.facebook.com/GameStop.
Non-GAAP MeasuresAs a supplement to our
financial results presented in accordance with U.S. generally
accepted accounting principles (GAAP), GameStop uses certain
non-GAAP measures, such as digital receipts, to provide a clearer
perspective of the current operating performance of the company.
GameStop defines digital receipts as the full amount paid by the
customer for digital content at the time of sale and/or the value
attributed to digital content when physical and digital products
are sold combined. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the company's reported
GAAP financial results. A reconciliation of forward-looking
non-GAAP projections to GAAP financial measures is not available as
the amount of potential adjustments cannot be determined at this
time.
Safe HarborThis presentation 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 the fourth quarter
and fiscal 2016, future financial and operating results and
projections, projected store openings, timing and terms of
potential acquisitions, 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 console
hardware and accessories; the timing of release and consumer demand
for new and pre-owned video game titles; our ability to continue to
expand, and successfully open and operate new stores for, our
collectibles and tech brands businesses; risks associated with
achievement of anticipated financial and operating results from
acquisitions; our ability to sustain and grow our console digital
video game sales; the timing and amount of recognition of tax
attributes; the impact of cost reduction initiatives, including
store closing charges and intangible asset impairments; the
risks associated with international operations, wireless industry
partnerships and operations and the completion and integration of
acquisitions; increased competition and changing technology in the
video game industry, including browser and mobile games and digital
distribution of console games, and the impact of that competition
and those changes on physical video game sales; and economic,
regulatory and other events, including litigation, that could
reduce or impact consumer demand or affect the company's business.
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, as amended,
for the fiscal year ended Jan. 30, 2016 filed with the SEC and
available at the SEC's Internet site at http://www.sec.gov or
http://investor.GameStop.com.
|
Schedule I |
GameStop Corp. |
Sales Mix |
|
|
9 Weeks Ended |
|
9 Weeks Ended |
|
|
Dec. 31, 2016 |
|
Jan. 2, 2016 |
|
|
|
|
Percent |
|
|
|
Percent |
|
|
Sales |
|
of Total |
|
Sales |
|
of Total |
|
Net Sales (in
millions): |
|
|
New video game
hardware |
$ |
519.1 |
|
20.7 |
% |
$ |
745.1 |
|
24.9 |
% |
|
New video game
software |
|
797.1 |
|
31.9 |
% |
|
1,032.2 |
|
34.5 |
% |
|
Pre-owned and value
video game products |
|
514.3 |
|
20.6 |
% |
|
558.5 |
|
18.7 |
% |
|
Video game
accessories |
|
187.8 |
|
7.5 |
% |
|
234.1 |
|
7.8 |
% |
|
Digital |
|
42.5 |
|
1.7 |
% |
|
46.1 |
|
1.5 |
% |
|
Technology Brands |
|
192.4 |
|
7.7 |
% |
|
133.6 |
|
4.5 |
% |
|
Collectibles |
|
176.9 |
|
7.1 |
% |
|
139.2 |
|
4.7 |
% |
|
Other |
|
71.9 |
|
2.8 |
% |
|
103.6 |
|
3.4 |
% |
|
|
|
|
|
|
Total |
$ |
2,502.0 |
|
100.0 |
% |
$ |
2,992.4 |
|
100.0 |
% |
|
|
Contact
Matt Hodges
VP, Corporate Communications
GameStop Corp.
817-424-2130
GameStop (NYSE:GME)
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