GameStop 2004 Annual Report Download - page 33

Results of Operations
The following table sets forth certain income statement items as a percentage of sales for the periods
indicated:
Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended
January 29, January 31, February 1,
2005 2004 2003
Statement of Operations Data:
Sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100.0% 100.0% 100.0%
Cost of sales ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 72.4 72.6 74.8
Gross proÑt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27.6 27.4 25.2
Selling, general and administrative expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20.2 19.0 17.1
Depreciation and amortizationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.0 1.8 1.7
Operating earnings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.4 6.6 6.4
Interest expense (income), net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0.0 0.0 (0.1)
Earnings before income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.4 6.6 6.5
Income tax expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.1 2.6 2.6
Net earnings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3.3% 4.0% 3.9%
The Company includes purchasing, receiving and distribution costs in selling, general and administrative
expenses, rather than cost of goods sold, in the statement of operations. For the Ñscal years ended January 29,
2005, January 31, 2004 and February 1, 2003 these purchasing, receiving and distribution costs amounted to
$9.2 million, $9.5 million and $10.1 million, respectively. The Company includes processing fees associated
with purchases made by check and credit cards in cost of sales, rather than selling, general and administrative
expenses, in the statement of operations. For the Ñscal years ended January 29, 2005, January 31, 2004 and
February 1, 2003 these processing fees amounted to $12.0 million, $10.7 million and $10.7 million,
respectively. As a result of these classiÑcations, our gross margins are not comparable to those retailers that
include purchasing, receiving and distribution costs in cost of sales and include processing fees associated with
purchases made by check and credit cards in selling, general and administrative expenses. The net eÅect of the
Company's classiÑcations is that its cost of sales as a percentage of sales is higher than, and its selling, general
and administrative expenses as a percentage of sales are lower than, they would have been had the Company's
treatment conformed with those retailers that include purchasing, receiving and distribution costs in cost of
sales and include processing fees associated with purchases made by check and credit cards in selling, general
and administrative expenses, by 0.2% and 0.1% for the Ñscal years ended January 29, 2005 and January 31,
2004, respectively. The eÅect of these classiÑcations on the Ñscal year ended February 1, 2003 was not
material.
The following table sets forth sales (in millions) by signiÑcant product category for the periods indicated:
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
January 29, 2005 January 31, 2004 February 1, 2003
Percent Percent Percent
Sales of Total Sales of Total Sales of Total
Sales:
New video game hardware ÏÏÏÏ $ 209.2 11.4% $ 198.1 12.6% $ 216.8 16.0%
New video game software ÏÏÏÏÏ 776.7 42.1% 647.9 41.0% 524.7 38.8%
Used video game products ÏÏÏÏ 511.8 27.8% 403.3 25.5% 296.4 21.9%
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 345.1 18.7% 329.5 20.9% 314.9 23.3%
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,842.8 100.0% $1,578.8 100.0% $1,352.8 100.0%
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