Officials from video game retailer GameStop have announced an update to the company’s fiscal 2005 guidance, as it finalizes the merger with previous rival Electronics Boutique.
For the combined company’s third fiscal quarter, comparable store sales are expected to decrease by a disappointing between 12.0 and 12.5 percent – in part due to sluggish September traffic resulting from hurricanes Katrina and Rita, as well as much higher profile releases at the same time last year, such as Grand Theft Auto: San Andreas
. For the fourth quarter, however, comparable store sales are expected to increase by between 8 to 10 percent, and for the fiscal year ending January 28th, comparable store sales are expected to increase from between 4 to 6 percent.
"The merger with Electronics Boutique is coming together extremely well. In a very short period of time, we have made exceptional strides bringing the two companies together," remarked R. Richard Fontaine, GameStop's Chairman and CEO. "The timing of our combination couldn't be better with Sony's PSP going into its first holiday gift season, Microsoft's Xbox 360 releasing in the U.S. on November 22 and in Europe on December 2, GameStop is well positioned to end the year with real sales momentum. Adding to the opportunities as we move into 2006, are the expected releases of Sony's PlayStation 3 and Nintendo's Revolution."
In related news, SunTrust Robinson Humphrey upgraded Gamestop's stock to "Buy" from "Neutral" early on Tuesday, setting a target price for the stock of $40, and the two combined announcements have helped Gamestop's stock price surge - as of mid-day action on the New York Stock Exchange, it was trading at $37.13, up almost 7 percent on the day, in heavy trading.