GameStop recorded a successful fourth quarter for its 2012 fiscal year, but suffered a significant net loss for the full year due to "restructuring, impairment and debt retirement expenses," the company announced today.
Both the fourth quarter and full year included an extra week compared to 2011.
GameStop's fourth-quarter sales were "essentially flat" year-over-year — $3.56 billion in 2012 versus $3.58 billion in 2011 — with a 60.3 percent increase in digital sales and $100 million of mobile sales "offsetting weaknesses in the core business." Taking into account $1.9 million of "asset impairment charges," the company's net earnings for the quarter were $261.1 million, a 49.6 percent increase over the $174.7 million in 2011's fourth quarter. The extra week contributed a not-insignificant amount to that number, approximately $10.1 million.
Total global sales for GameStop dropped 7 percent from $9.55 billion in 2011 to $8.89 billion in 2012. The company's core categories — new hardware, new software and used games — all decreased year-over-year, a decline that GameStop attributed to the longer-than-usual console generation. GameStop's "Other" category, which includes digital and mobile sales, jumped 21.2 percent year-over-year.
Due to $680.7 million in "restructuring, impairment and debt retirement expenses," GameStop recorded a net loss of $269.7 million for its 2012 fiscal year, compared to net income of $339.9 million in fiscal 2011 — a drop of more than 179 percent. Excluding those charges, GameStop's adjusted net earnings for fiscal 2012 came in at $403 million, a decrease of 0.5 percent from $405.1 million in fiscal 2011.
"As we look towards the start of the new console cycle, our industry market model indicates a return to growth with the launch of new game systems," said GameStop CEO Paul Raines in the earnings report. The company also said it expects that the first half of the year will be "challenging," since it believes consumers will be saving money for highly anticipated fall games such as Grand Theft Auto 5 as well as new consoles including the PlayStation 4.