(By Salman - iStockAnalyst Writer)
Bullish Stocks of the day : GameStop (NYSE: GME), Ensco International (NYSE: ESV)
GameStop Corp. is the world's largest video game retailer. It sells new and used video game hardware; video game software; video game accessories, including controllers, memory cards, and other add-ons; PC entertainment software etc. The company sells its products through its stores, as well as through an electronic commerce Website gamestop.com. As of January 31, 2009,
GameStop Corp. operated 6,207 stores primarily under the names GameStop and EB Games that are located in regional shopping malls and strip centers in the United States, Australia, Canada, and Europe.
The company recently announced
better than expected quarterly results. For the quarter ended May 2, net
income increased 13% to $70.4 million, or 42 cents a share, compared with earnings of $62.1 million, or 37 cents a share, in the year ago period. Revenue climbed 9% to $1.98 billion. Same-store sales slipped by 1.5% during the period. Gross margin rose to 27.4% from 26.1%. Analysts on average had projected earnings of 41 cents a share on revenue of $1.98 billion.
The company continues to be the dominant player in the used game business. Used product sales grew a robust 32% and sales of used games accounted for nearly 28% of the company's revenue base for the period, compared to 23% for the same period last year. Used game happens to be one of the most rewarding businesses. Used game sales also accounted for 48% of the company's total gross profit in the recent quarter.
Looking ahead, for the second quarter ending in August,
the company expects earnings of 28 cents to 33 cents a share, compared with 34 cents a share in the year-earlier period. Comparable-store sales for the quarter are expected to decline between 8% and 11%. GameStop also reaffirmed its full year 2009 earnings guidance to a range of $2.83 to $2.93 a share, representing a 18% to 22% increase over fiscal 2008. Full year comparable store sales are now expected to range from flat to +2%. The guidance is being seen as too conservative and it is expected that the company would be able to comfortably outperform.
Recession hasn't brought a halt to company's aggressive worldwide expansion plans will continue our worldwide expansion and expect to open between 75 and 100 stores with a goal of around 400 new stores for the year. During the quarter, GameStop opened 114 new stores and expects to open between 75 and 100 stores in the current quarter with a goal of around 400 new stores for the year.
Looking at the balance sheet, the company has $578.14 million in cash and cash equivalents and $30.98 billion in debt.
