Wal-Mart Stole Market Share from GameStop, GameStop to Continue Explosive Expansion
Posted by Iflove New Games on January 7, 2009 at 1:26 amWal-Mart Stole Market Share from GameStop, GameStop to Continue Explosive Growth: Big-box retailers such as Wal-Mart gained market share against specialty retail GameStop over the holiday season due to highly-competitive pricing, Janco Partners analyst Mike Hickey said in a research note Tuesday. Grapevine, Tex.-based retailer GameStop already has over 5,000 stores worldwide, but there’s still “plenty of room … for new store openings,” one analyst says.
Wal-Mart Stole Market Share from GameStop: “We expect GameStop may have lost intended foot traffic this holiday to big-box retailers offering highly promotional pricing on numerous consumer products,” he stated. “We think low price retailers like Wal-Mart, arguably the largest domestic videogame retailer, likely took market share this holiday.”
What places like Wal-Mart do not offer, however, are used games, a business that makes up around half of GameStop’s total gross profits. That could be GameStop’s savior when the company reports its holiday period sales on Thursday.
“…We expect GameStop’s reported holiday sales performance will benefit from strength in their trade-in business, the relative strength of videogame products and recently reduced guidance from management,” Hickey added.
Analyst: GameStop to Continue Explosive Growth
Grapevine, Tex.-based retailer GameStop already has over 5,000 stores worldwide, but there’s still “plenty of room … for new store openings,” one analyst says.
Colin Sebastian with Lazard Capital Markets said in a Monday investor note, “We believe GameStop continues to generate positive and steady [return on investment] on new stores despite increasing penetration in North America and in some international markets.”
He added, “Moreover, the company expects to maintain the current pace of approximately 500 new store openings annually over the next three to four years, with capacity in the U.S. estimated to be 50 percent higher than current levels.”
The company currently employs over 44,000 full-time employees.
GameStop is continuing to expand outside of North America, establishing stores in Australia and Europe.
Sebastian also addressed digital distribution, a trend that, in the most extreme case, would cut retailers out of the revenue loop.
He said that digital distribution is a “longer-term threat” to GameStop. “…Over the next two to three years we believe the bulk of online distribution will be add-on content enhancing the experience of games purchased through the traditional retail channel.”
Sebastian currently has a “buy” rating and a $61 price target for GameStop stock. Shares were down 36 cents to $39.47 in late morning trading on the New York Stock Exchange.
Big-box retailers such as Wal-Mart gained market share against specialty retail GameStop over the holiday season due to highly-competitive pricing, Janco Partners analyst Mike Hickey said in a research note Tuesday.
Related posts
Thank you for visting iflove.com, the fairy legend of Edward Chen the Movie Star! You may want to Find Love or subscribe to RSS feed. Enjoy or do a search!
Posted by Iflove New Games on January 7, 2009 at 1:26 am · Under Games Fan Story, game sites, games reviews. You can trackback from your own site.