PSP World

GameStop Reports Record Third Quarter 2007 Results

Comparable Store Sales Grow 46.3% EPS Exceeds High-End of Guidance by $0.12 per share Operating Earnings Increase 116% EPS, Revenue, and Comparable Store Sales Guidance Raised for Fiscal 2007

GameStop the world's largest video game and entertainment software retailer, has announced record financial results for the third quarter ended November 3, 2007.

GameStop's net earnings were $52.0 million for the third quarter of 2007, including debt retirement costs of $3.8 million ($2.4 million, net of tax benefits), a 283% increase over the third quarter of 2006. Diluted earnings per share were $0.31 for the third quarter of 2007, including debt retirement costs of $0.02 per diluted share, exceeding the high-end of previously released guidance by $0.12 per share.

Total sales increased 59.3% to $1,611.2 million in comparison to $1,011.6 million in the prior year quarter. Comparable store sales increased 46.3% during the third quarter, also beating previously released guidance of 30.0% to 32.0%. During the third quarter, new video game software sales rose 59% and new video game hardware sales increased 149%. The top selling video games during the quarter were HALO 3 from Microsoft, MADDEN NFL '08 by Electronic Arts, Activision's GUITAR HERO III, BIOSHOCK by Take 2 Interactive and WII PLAY WITH REMOTE from Nintendo of America.

R. Richard Fontaine, GameStop's Chairman and Chief Executive Officer, stated, "Our third quarter sales and earnings are a reflection of not only the real momentum in the video game business as a whole, but a particularly strong statement that GameStop's model continues to run ahead of the growth curve. We had an outstanding quarter both domestically and internationally, while our e-commerce division, GameStop.com, and video game publication, Game Informer, had record quarters.

"We continue to do an excellent job of controlling our business in the face of rapid expansion in most of the 16 countries where GameStop does business. Our expenses and inventory controls have never been better planned and executed, and the scheduling of sales support for our more diverse customer base is more refined and productive than ever before.

"Our new store openings continue to generate excellent returns. During the quarter we opened 181 stores worldwide; surpassing the 5,000 store milestone, and believe that there are many more opportunities for additional store growth. Altogether, all signs point towards GameStop having a strong fourth quarter and robust 2007," concluded Fontaine.

Daniel DeMatteo, GameStop's Vice Chairman and Chief Operating Officer, noted, "We have already seen strong consumer demand for this fall's new video game software line-up. MADDEN NFL '08 and HALO 3 have sold millions of copies and are just two of the many exciting new titles that have launched this fall. As we prepare for the all important fourth quarter, our goal is to capitalize on the expanding landscape of consumers by delivering the most video gaming options."