GameStop shares move higher on strong holiday game sales

Sales of new video games rose 5.8 percent in the nine weeks ended Jan. 3.
Sales of new video games rose 5.8 percent in the nine weeks ended Jan. 3. Star-Telegram

The stock market is selling off, but shares of Grapevine-based GameStop (ticker: GME) are trading 10 percent higher today.

In a statement released after the close of trading on Tuesday, the consumer electronics retailer said sales of new video games rose 5.8 percent in the nine-week period ended Jan. 3, driven by a 94.4 percent increase in PlayStation 4 and Xbox One software. That helped to counter waning demand for new game consoles, which were released in late 2013 and presented difficult comparisons. The company said sales of new hardware declined 32 percent.

Overall, total global sales during the holiday period were $2.94 billion, down 6.7 percent from 2013, and comparable store sales slcined by 3.1 percent.

But investors focused on game sales, where there has been concern that digital downloads will eat into the retailer’s business.

CEO Paul Raines said demand for gaame suring the holidays was strong, “resulting in new software sales growth. We expect that trend to continue into the first quarter. Overall, each of our business units performed well giving us positive momentum as we look toward 2015.”

GameStop said sales in its mobile & consumer electronics category increased by 28 percent, driven by 76 percent growth in Technology Brands, comprising other retail chains it has acquired and expanded: Spring Mobile, Cricket and Simply Mac.

The company reaffirmed its fourth-quarter earnings forecast of as much $2.24 a share.

By mid-morning, GameStop shares were up $3.90 to $36.67.