Shares of Grapevine-based GameStop gained more than 7 percent in early trading Friday after reporting better-than-expected first-quarter results from strong sales of new video games and two fast-growing electronics chains.
Net income rose 8.5 percent to $73.8 million, or 68 cents a share, the retailer said in a statement Thursday, beating the average estimate from analysts of 58 cents.
Sales grew 3.2 percent to $2.06 billion in the quarter that ended May 2, sparked by a 9.6 percent gain in new software sales. That exceeded estimates of $2.02 billion. Comparable-store sales increased 8.6 percent, led by double-digit increases in Australia and Canada.
Sales of pre-owned games, a high-margin business for GameStop, declined by 3.4 percent. But revenue in the company’s fast-growing Technology Brands division — reflecting its Spring Mobile and Simply Mac chains — increased by 70 percent to $102.2 million as the company added 65 stores in the quarter.
The stock (ticker: GME) was up $3.05 a share, at $43.98, by mid-morning. On Thursday, the stock gained 3.7 percent to $40.92.
For the year, the company raised its profit guidance to as much as $3.83 a share, from a peak estimate of $3.80, citing a reduction in shares outstanding. GameStop continues to predict that sales, excluding new stores, will increase 1 to 6 percent.
Staff writer Steve Kaskovich contributed to this report, which includes material from Bloomberg News.