While most of retail struggles through a tough end-of lifecycle period, US games giant GameStop has reported revenues above expectations and has predicted total 2006 revenues far higher than previously estimated.
The dominant games retail force in the States has revealed fourth quarter results ending January 28th of $1.667 billion in revenue, compared with the consensus prediction of $1.659bn. GameStop also forecast financial year ’06 earnings of up to $5.140bn, as much as 17 per cent above previous estimates. This was part of the company’s ambitious overall earnings growth forecast of 25 per cent annually over the next three years.
“The company provided a very bullish outlook for revenue and earnings growth in financial year 2006 due to a combination of cost savings, better than expected integration of the Electronics Boutique merger and continued strength and better margins on used games,” said Wedbush Morgan analyst Michael Pacther.
“We had expected the company to provide cautious initial financial year ’06 guidance due to continued supply constraints of Xbox 360 units, continued weakness in current generation software sales and uncertainties with the launch of the next generation.”
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