Gamestop (GME) reports 2-cent beat, guides 2008 above consensus

Earned $1.14 vs. $1.12 estimates

Business Outlook

For fiscal 2008 (the 52-week year ending January 31, 2009), sales are projected to grow between 19.0% and 21.0%, with comparable store sales ranging from +10.0% to +12.0%, driven by a strong lineup of video game title releases across all platforms. Diluted earnings per share for the full year are expected to range from $2.25 to $2.34, an increase of between 25% and 30% over fiscal 2007. GameStop expects to open between 575 and 600 stores worldwide in fiscal 2008.

For the first quarter of fiscal 2008, the company expects comparable store sales to range from +24.0% to +25.0%, led by continued demand for all console and handheld systems as well as a strong slate of new video game releases, such as Nintendo’s SUPER SMASH BROS. BRAWL for the Wii, Capcom’s DEVIL MAY CRY 4 and GRAND THEFT AUTO IV from Take Two Interactive. Diluted earnings per share are expected to range from $0.32 to $0.33. This compares to earnings per share of $0.15 in the first quarter of 2007.

Looking beyond 2008, GameStop currently expects earnings per share to grow at least 25% in fiscal 2009 (the year ending January 2010) based on several key factors, including: the company’s growing worldwide retail footprint, the company’s ongoing cash generation, the continued expansion of the video game industry, and the broadening consumer base.