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GameStop's good fourth quarter not enough to rescue the full year

Although video game retailer GameStop had a favorable fourth quarter, its full fiscal year results don't look so healthy, due to restructuring, impairment and debt retirement expenses.
Although video game retailer GameStop had a favorable fourth quarter, its full fiscal year results don't look so healthy, due to restructuring, impairment and debt retirement expenses. GameStop recorded losses of $269.7 million for the year ended February 2, 2013, compared to profits of $339.9 million year-over-year. The company was keen to stress that excluding these goodwill impairment costs and expenses of $680.7 million, its adjusted earnings were $403.0 million, only slightly down from $405.1 million year-over-year. Total sales for the year were down by 7 percent to $8.89 billion from $9.55 billion, as sales of new hardware, new software and pre-owned declined year-over-year. GameStop says this is due to the effect of the longevity of the current console cycle. In comparison, the company's digital and mobile efforts continued to improve, driving its "Other" business up by 21.2 percent in sales year-over-year -- although GameStop notes this was nowhere near enough to combat the declines elsewhere. As for the fourth quarter, revenue was down slightly to $3.56 billion from $3.58 billion, but profits for the quarter were $261.1 million, up from $174.7 million year-over-year. This was thanks in part to notable increases in digital and mobile sales -- digital in particular was up 60.3 percent year-over-year. Looking to the 2013 fiscal year, GameStop CEO Paul Raines hopes that the new console cycle will help the company return to growth. The launch of big-name titles like Grand Theft Auto V should also help, he noted. However, his statements did not fully appear to match his predictions, as the company believes its total sales for the 2013 fiscal year will be down compared to this year -- anywhere between 8 percent down and flat. The company will hold an earning conference call later today, that will no doubt go into more details regarding the figures, including digital and mobile numbers. Gamasutra will report on any new information as it comes.

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