On Nov. 21, video game hardware, software, and accessories retailer GameStop
- Sales grew 89.4% to $1 billion, as GameStop continued to benefit from last year's acquisition of archrival Electronics Boutique. Same-store sales advanced 8.8%. Video game software sales grew 14%, while hardware sales advanced 69%.
- Gross margins fell due to lower-margin hardware sales, but lower SG&A expenses from merger-related savings drove better operating margins.
- Net income came in at $0.17 per share, versus a loss last year; both periods contained merger-related charges.
- Management expects full-year 2006 diluted earnings of $1.98-$2.04 per share, total sales growth of 15%-17%, and comparable sales of 7%-9%.
(Figures in thousands, except per-share data)
Income Statement Highlights
Q3 2006 |
Q3 2005 |
Change |
|
---|---|---|---|
Sales |
$1,011,560 |
$534,212 |
89.4% |
Net Profit |
$13,569 |
($2,460) |
N/A |
EPS |
$0.17 |
($0.04) |
N/A |
Diluted Shares |
79,291 |
56,630 |
40.0% |
Get back to basics with a look at the income statement.
Margin Checkup
Q3 2006 |
Q3 2005 |
Change* |
|
---|---|---|---|
Gross Margin |
31.2% |
33.1% |
(1.9) |
Operating Margin |
4.4% |
1.9% |
2.5 |
Net Margin |
1.3% |
(0.5%) |
1.8 |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
Assets |
Q3 2006 |
Q3 2005 |
Change |
---|---|---|---|
Cash + ST Invest. |
$180,948 |
$81,031 |
123.3% |
Accounts Rec. |
$32,841 |
$34,662 |
(5.3%) |
Inventory |
$844,979 |
$746,653 |
13.2% |
Liabilities |
Q3 2006 |
Q3 2005 |
Change |
---|---|---|---|
Accounts Payable |
$605,773 |
$519,972 |
16.5% |
Long-Term Debt* |
$12,652 |
$35,107 |
(63.9%) |
Learn the ways of the balance sheet.
Cash Flow Highlights
Fools will have to wait until GameStop files its 10-Q for juicy cash flow details.
Find out why Fools always follow the money.
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Related Foolishness:
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Electronic Arts, GameStop, and Activision are Motley Fool Stock Advisor recommendations. Try Tom and David Gardner's flagship investing advice newsletter free for 30 days.
Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.