Electronics Boutique Reports Record First Quarter Sales, Increasing 23%

Electronics Boutique Reports Record First Quarter Sales,
Increasing 23%
-- Video Game Software Sales Grew 28% -- -- Global Store Base Increased to
1,623 -- 


WEST CHESTER, Pa., May 20  /PRNewswire-FirstCall/ -- Electronics Boutique
Holdings Corp.  today announced financial results for its fiscal first quarter
ended May 1, 2004.  The results were highlighted by a 23 percent increase in
sales with strong growth in both new and pre-played video game software, as
well as a continued increase in market share.

For the thirteen-week period ended May 1, 2004, total revenues grew 23 percent
to $372.4 million, compared with $303.5 million for the same period a year ago.
 This growth was driven by a 28 percent increase in total video game software
sales and a 19 percent increase in total hardware sales, compared with the same
quarter in fiscal 2004.  Net income for the quarter was $3.0 million, or $0.12
per diluted share, compared with net income of $3.2 million, or $0.12 per
diluted share, for the same quarter in fiscal 2004.

Comparable store sales declined 2.5 percent, in line with our expectations. 
This decrease compares with exceptionally high comparable store sales in the
first quarter of fiscal 2004, which were generated by the combined release of
"The Legend of Zelda: The Wind Waker" for GameCube and the Game Boy Advance SP
handheld.  Despite this difficult comparison, the company achieved double-digit
increases in its comparable store sales for both its U.S. strip center stores
and its European stores for the first quarter of fiscal 2005, highlighting the
positive impact of these locations.

"Electronics Boutique had a great first quarter. We delivered strong software
sales that outperformed our industry, and we posted solid pre-played sales.  In
particular, our U.S. strip center and international stores continue to deliver
excellent results, underscoring the value of our store expansion strategy,"
said Jeffrey W. Griffiths, president and chief executive officer.

"During the quarter, we continued to implement this strategy, opening 104 new
stores. We plan to open an additional 300 new locations, bringing our total
number of new stores to 400 for fiscal 2005.  As these new stores mature over
the next several quarters, we expect to achieve increased sales and operating
margin."

Business Outlook

"Based on what we saw at the Electronic Entertainment Expo (E3), we have a very
positive outlook for the remainder of the year.  We believe that our industry
will continue to grow in the coming quarters, fueled by the recent price drop
of Sony's PlayStation 2 and Microsoft's Xbox, as well as an exciting lineup of
new software titles in the latter half of the year," noted Mr. Griffiths.

For the second quarter of fiscal 2005, the company anticipates earnings to be
in the range of $0.06 to $0.08 per diluted share based on an average diluted
share count of 24.3 million shares. This estimate is based on comparable store
sales declining in the range of 3 to 5 percent for the 13- week period ending
July 31, 2004.

For the full fiscal year 2005, the company expects total sales to increase in
the range of 17 to 21 percent.  Based on this, the company reaffirms its
previous annual earnings forecast.  Due to the company's continued activity in
its stock repurchase program, the company now expects full year earnings to be
in the range of $1.90 to $2.00 per diluted share based on an average share
count of 24.5 million.  Previous guidance was for earnings in the range of
$1.85 to $1.95 per share with the change due solely to the change in the share
base. To date, the company has repurchased 1.2 million of the 2.0 million
shares authorized by its board of directors in November 2003.

The company will host an investor conference call at 5:00 p.m. (Eastern) today
to review its financial results and operations. The call will be open to all
interested investors through a simultaneous Internet broadcast at
http://www.ebholdings.com/, and it will be archived for two weeks on the
website. A recording of the call will also be available May 20, 2004 at 8:00
p.m. (Eastern) through May 27, 2004 at midnight (Eastern). Listeners should
call [phone] (domestic) or [phone] (international), and use
access code 7333377.

About Electronics Boutique Holdings Corp.

Electronics Boutique, a Fortune 1000 company, is the world's largest specialty
retailer dedicated exclusively to video game hardware and software, PC
entertainment software, accessories and related products. As of May 1, 2004,
the company operated 1,623 stores in the United States, Australia, Canada,
Denmark, Germany, Italy, New Zealand, Norway, Puerto Rico and Sweden --
primarily under the names EB Games and Electronics Boutique. The company
operates an e-commerce website at http://www.ebgames.com/. Additional company
information is available at http://www.ebholdings.com/.

This release contains forward-looking statements, including statements by
Jeffrey Griffiths and in our Business Outlook, related to the financial
performance of Electronics Boutique for the second quarter and full year for
the fiscal year ending January 29, 2005, to the growth prospects and
opportunities for Electronics Boutique, and to the growth prospects and
projected sales for hardware, software and for the video game industry in
general. Forward-looking statements refer to expectations, projections and
other characterizations of future events or circumstances and are often
identified by the use of words such as "may," "will," "expect," "believe,"
"anticipate," "intend," "could," "estimated," "continue" or comparable
terminology. In addition to factors specified in Electronics Boutique's recent
filings with the Securities and Exchange Commission, there are other factors
that could cause actual results to materially differ from those expressed or
implied in these forward-looking statements, such as the schedule for new
software releases, consumer demand for video game hardware and software, the
timing of the introduction of new generation hardware systems, pricing changes
by key vendors for hardware and software and the timing of any such changes,
the adequacy of supplies of new and pre-played product, costs associated with
litigation, increased competition and promotional activity from other
retailers, the availability of suitable locations for new stores and the timing
of the opening of these stores. In light of the risks and uncertainties
inherent in the forward-looking statements, these statements should not be
regarded as a representation by Electronics Boutique or any other person that
the projected results, objectives or plans will be achieved. Electronics
Boutique undertakes no obligation to revise or update the forward-looking
statements to reflect events or circumstances after the date hereof.

                        -Financial Tables Follow-


                     Electronics Boutique Holdings Corp.
                Consolidated Statements of Income (unaudited)
              (Amounts in thousands, except per-share amounts)

                                                      13 Weeks Ended
                                                 May 1,            May 3,
                                                  2004              2003

  Net sales                                     $370,964          $301,821
  Management fees                                  1,453             1,643
  Total revenues                                 372,417           303,464

  Cost of goods sold                             271,154           223,269

  Gross profit                                   101,263            80,195

  Costs and expenses:
  Selling, general and administrative
   expense                                        88,922            69,302
  Depreciation and amortization                    7,956             6,287

  Operating income                                 4,385             4,606
  Interest income, net                               452               463

  Income before income tax expense                 4,837             5,069
  Income tax expense                               1,791             1,897

  Net income                                      $3,046            $3,172


  Net income per share:
  Basic                                            $0.12             $0.12
  Diluted                                          $0.12             $0.12


  Weighted average shares outstanding:
  Basic                                           24,526            25,884
  Diluted                                         24,913            25,937



                    Electronics Boutique Holdings Corp.
            Selected Consolidated Balance Sheet Data (unaudited)
                           (Amounts in thousands)

                                          May 1,      May 3,   January 31,
                                           2004        2003       2004


  Cash and cash equivalents               $82,290    $118,305    $157,968

  Merchandise inventories                 265,529     195,012     253,577

  Total current assets                    385,946     344,786     477,687

  Total assets                            544,834     485,880     636,375


  Accounts payable                        165,231     146,178     220,481

  Current liabilities                     236,662     193,774     311,679

  Total liabilities                       255,159     205,901     332,395

  Stockholders' equity                    289,675     279,979     303,980



                                 Schedule 1
                     Electronics Boutique Holdings Corp.
                          Domestic Retail Sales Mix

                                          13 Weeks Ended    13 Weeks Ended
                                                   May 1,            May 3,
                                                    2004              2003

  Video Game Software                                61%               60%
  Video Game Hardware                                17%               15%
  PC Software                                         9%               10%
  Accessories                                        11%               12%
  Other                                               2%                3%


DATASOURCE: Electronics Boutique Holdings Corp.



CONTACT:  James A. Smith, Chief Financial Officer, Electronics Boutique

Holdings Corp., [phone]



Web site:  http://www.ebgames.com/

http://www.ebholdings.com/ 

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