GameStop enjoys bumper Christmas but expects Q4 sales to fall

Like-for-like sales in December grew 4.4 per cent at retailer GameStop, although total numbers for the nine weeks ending January 3rd were down year-on-year.

Total sales for the period reached $2.95bn, down on the previous year’s $3.15bn. New hardware sales were surprisingly down 32 per cent from $1.05bn to $713m, although new software jumped 5.8 per cent from $1.08bn to $1.14bn. PS4 and Xbox One software was up 94.4 per cent.

Pre-owned software sales fell ever so slightly to $560m but digital was slightly up at $53.2m.

Having previously forecast full year like-for-like growth of between two and five per cent, it now expects growth to be between three and four per cent.

For Q4 it has narrowed estimates from anything between growth of two per cent and a decline to five per cent to a straight fall of anywhere between one and 2.5 per cent. This is due to a sharp like-for-like drop of 12 per cent in November – last year’s PS4 and Xbox One launch makes for some tough comparisons.

During the holiday period, consumer demand for video games was strong, resulting in new software sales growth,” CEO Paul Raines said. We expect that trend to continue into the first quarter. Overall, each of our business units performed well giving us positive momentum as we look toward 2015.”

UK retailer GAME last night reported a surge in Christmas sales volumes but a dip in earnings, leading to a warning that profits will not meet expectations. The Black Friday and Christmas price wars were blamed.