Computer and video games retailer Game today posted an expected 59 per cent slump in first-half profit and said sales had continued to fall in its second half.
The group, which trades from 1,368 stores, concessions and franchises in nine European countries and Australia, made a profit before tax and non-recurring costs of $14.5 million in the six months to July 31st.
That compares with company guidance of £13 million to £16 million and £35.8 million pounds in the 2008 period.
The profit fall partly reflects an exceptionally strong release schedule in 2008, including record breaking software launches such as Wii Fit.
First-half sales fell 7 per cent, while sales at stores open at least a year were down 16.3 per cent and down 16.6 per cent for the 33 weeks to September 19th.
Game said its gross margin increased 190 basis points to 28.9 per cent and it raised its full-year gross margin guidance to a rise of 170 to 220 basis points from guidance of 150 to 175 basis points.
The company said that although the retail environment continued to be tough it was "optimistic" for the Christmas selling period.
This optimism was based on recent manufacturer price reductions on the Microsoft Xbox 360 Elite and Sony's new model Playstation 3 which are stimulating the hardware market and a strong line up of software and accessory releases in the run-up to Christmas.
The firm is paying an interim dividend of 1.88 pence, up 5.0 per cent.
Game shares have lost nearly a quarter of their value over the last year on fears of slower growth, lack of newsflow on the next generation of consoles and the threat posed by digital distribution, underperforming general retailers by about 35 per cent.
Reuters