Gamers’ mecca GameStop (NYSE:GME) reports its fiscal 2008 second-quarter earnings bright and early tomorrow morning. Want to know what Wall Street expects to see? Read on. Want to know what really matters? Read on a bit more.

What analysts say:

  • Buy, sell, or waffle? Fifteen analysts still play GameStop, down one from last quarter. They give the stock 11 buy ratings and four holds.
  • Revenue. On average, analysts expect to see sales rise 26% to $1.69 billion.
  • Earnings. Profits could double to $0.28 per share.

What management says:
Twice the profits -- sounds pretty good, huh? But get this: Last quarter, GameStop's net income increased by more than 150%. Management informed us that the trouble twins Electronic Arts (NASDAQ:ERTS) and Take-Two (NASDAQ:TTWO) powered the quarter through boffo sales of Army of Two and Grand Theft Auto IV, respectively. Ubisoft and Nintendo titles lent a helping hand.

Looking forward, GameStop predicts that additional offerings from gaming companies like Nintendo, Konami, and Microsoft (NASDAQ:MSFT) will maintain the momentum throughout this year.

What management does:
And apparently, it doesn't even need to expand margins to do it -- not gross margins, at least. Those continue to slide, as GameStop just as continually proves the validity of the maxim "make it up on volume." Operating and net margins just keep on growing.

Margins

2/07

5/07

8/07

11/07

2/08

5/08

Gross

27.7%

27.3%

26.6%

25.8%

25.6%

25.4%

Operating

6.4%

6.5%

6.5%

6.6%

7.1%

7.2%

Net

3.0%

3.1%

3.2%

3.5%

4.1%

4.3%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Perhaps the most interesting factoid GameStop voiced last quarter, though, was the number 38. As in, 38% of gamers are now female.

Because with no major competitors left to beat (yes, I know there's still Best Buy (NYSE:BBY) and Circuit City (NYSE:CC) -- but their attention is split; only GameStop focuses solely on games), GameStop's ability to steal market share and turn it into growth is limited. As Grand Theft Auto has taught us, you gotta have somebody to steal from.

GameStop's future, therefore, hinges on its ability to grow the gaming market. Tapping into the female gaming population for long-term growth seems like an excellent way to accomplish that goal.

Check out recent happenings among two of GameStop's star suppliers in:

Microsoft and Best Buy are Motley Fool Inside Value recommendations. Take-Two Interactive Software is a Motley Fool Rule Breakers selection. GameStop, Electronic Arts, and Best Buy are Motley Fool Stock Advisor picks. The Fool owns shares of Best Buy. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Smith does not own shares of any company named above. Why do we tell you this? Because The Motley Fool has a disclosure policy.