GameStop Touts Strong Demand for Videogames Over Holidays

By Josh Beckerman 

GameStop Corp. said Tuesday that consumer demand for videogames was strong during the holiday period and it expects that trend to continue into the first quarter.

The bullish comments sent shares up about 10% after hours.

The company reported, however, that its same-store sales fell 3.1% for the nine weeks ended Jan. 3, as total sales fell 6.7% to $2.94 billion.

November comparisons were hurt by the 2013 launches of the PS4 and Xbox One consoles, with same-store sales posting a 12% decline in November and a 4.4% increase in December.

The company, which backed its earnings forecast, said figures were hurt by the strong the U.S. dollar, noting that the total sales decline was 4% on a constant-currency basis.

The retailer in November offered a downbeat forecast for the holiday quarter, saying it expected to post $2.08 to $2.24 a share in earnings, along with a range of between a 5% decline and 2% growth for same-store sales. On Tuesday, GameStop said it expects a same-store sales decline of 1% to 2.5%.

The company has benefited from demand for next-generation consoles from Microsoft Corp., Sony Corp. and Nintendo Co. Yet, casual gamers have been drawn more to digital diversions on their phones in recent years, while the biggest game publishers are relying more on distributing content through online channels.

GameStop has sought to address concerns about its brick-and-mortar business model by selling more downloadable content and refurbishing and re-selling mobile devices such as smartphones and tablets.

-Michael Calia contributed to this article.

Write to Josh Beckerman at [e-mail]

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