Increasing digital sales weren't enough to keep GameStop's overall numbers from declining in the first quarter of 2012.
$2 billion in sales over a three month period doesn't seem like much to complain about, but it's not the best news ever for the folks at GameStop. The figure represents a decrease of 12.2 percent over the same period in 2011, when the company earned $2.28 billion. Net income for the quarter was $72.5 million, down from $80.4 million in the first quarter of 2011.
Digital sales were actually up substantially in the quarter, climbing 23 percent, while mobile sales hit $12 million, which GameStop said is "on plan to reach the company's goal for mobile sales of $150 to $200 million in 2012." Unfortunately, sales in the pre-owned and "Other" category, which includes digital and mobile, were down "slightly" for the quarter, while sales of new hardware and software "declined more than expected," leading to the overall dip.
The slowdown isn't entirely surprising, given the looming end of the current console cycle, and GameStop CEO said that despite the slowdown, the company hit its earning targets for the quarter thanks to "gross margin expansion and positive profit contributions" from pre-owned, mobile and digital sales. "We expect those segments to fill the profitability gap as we transition to the new console cycle," he added.
For the second quarter of 2012, GameStop is predicting a comparable store sales drop of five percent to 11 percent, while full-year sales are expected to range from a five percent decline to flat. GameStop's share price dropped a couple of points on the day as well and currently sit at $18.52, down from a close of $20.85 on May 16.