GameStop Corp. (GME), a global family of specialty retail brands that makes the most popular technologies affordable and simple, has reported a 10.70 percent rise in profit for the quarter ended Jan. 31, 2015. The company has earned $244.10 million, or $2.23 a share in the quarter, compared with $220.50 million, or $1.89 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $235.50 million, or $2.15 a share compared with $222.40 million or $1.90 a share, a year ago. Revenue during the quarter dropped 5.64 percent to $3,476.10 million from $3,683.80 million in the previous year period. Gross margin for the quarter expanded 86 basis points over the previous year period to 28.09 percent. Total expenses were 88.90 percent of quarterly revenues, down from 90.27 percent for the same period last year. This has led to an improvement of 137 basis points in operating margin to 11.10 percent.
Operating income for the quarter was $385.90 million, compared with $358.40 million in the previous year period.
Paul Raines, chief executive officer, stated, "2014 was a year of continued growth, diversification and expansion of the GameStop family of specialty retail brands. In our core video game business, we achieved our highest market share in history with 28% share of next-generation hardware, 46% share of next-generation software and an estimated 42% share of downloadable content. For 2015, we are focused on maintaining and growing market share in physical and digital gaming and, based on their superior returns, expanding our portfolio of Technology Brands by 350 to 550 stores."
For fiscal year 2015, GameStop Corp. forecasts net income to be in the range of $392 million to $415 million and operating income to grow in the range of 6.50 percent to 7 percent. The company projects diluted earnings per share to be in the range of $3.60 to $3.80 for the same period.
For the first quarter of fiscal 2015, GameStop Corp. forecasts net income to be in the range of $58 million to $65 and operating income to grow in the range of 5 percent to 5.50 percent. The company projects diluted earnings per share to be in the range of $0.53 to $0.60 for the same period.
Working capital increases sharply
GameStop Corp. has recorded an increase in the working capital over the last year. It stood at $422.80 million as at Jan. 31, 2015, up 89.09 percent or $199.20 million from $223.60 million on Feb. 01, 2014. Current ratio was at 1.26 as on Jan. 31, 2015, up from 1.13 on Feb. 01, 2014. Debt increases substantially
GameStop Corp. has witnessed an increase in total debt over the last one year. It stood at $355.70 million as on Jan. 31, 2015, up 8,792.50 percent or $351.70 million from $4 million on Feb. 01, 2014. Total debt was 8.38 percent of total assets as on Jan. 31, 2015, compared with 0.10 percent on Feb. 01, 2014. Interest coverage ratio decreased to 74.21 for the quarter from 199.11 for the same period last year.
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