GameStop 2007 Annual Report Download - page 6

Download and view the complete annual report

Please find page 6 of the 2007 GameStop annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 115

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115

• Superior Sales Growth. Sales grew to $7.1 billion,
an increase of 33% over our strong 2006 numbers. A
highlight for the year was achieving the biggest holiday
season we have ever had with sales over $2.3 billion.
• Exceptional Net Income Growth. Net earnings climbed to
$288.3 million, which was an 82% increase over last year.
• Strong Balance Sheet. In addition to funding our
aggressive store growth and continuing to refi ne our
infrastructure, we paid down our debt by $282 million,
and still ended the year with a cash balance of $857
million. In addition, in February of 2008, the Board
approved an additional $130 million to accelerate debt
repurchases. Of the original $950 million debt obligation
we took on to complete the merger with EB Games in
October of 2005, we anticipate having only $450 million
outstanding by the end of this year.
• Strategic Stock Split. On March 16, 2007, we completed
a 2:1 stock split, increasing the number of outstanding
shares and allowing more potential shareholders to
invest in GameStop.
• Outstanding Stock Appreciation. Our stock price grew
125% in 2007, earning us the eighth position on Fortune’s
Top 20 Performing Stocks of 2007.
• Aggressive Worldwide Growth. In 2007, we added 586
new stores and ended the year with 5,264 stores in 16
countries. Both the performance and return on investment
of new stores set records last year. A productive business
model giving us very fast cash-on-cash returns, coupled
with a very low risk-to-reward site selection strategy and
an experienced real estate team, make a compelling
case for GameStop to stay on our aggressive worldwide
growth course.
• Recognized Performance. In April 2007, we were
recognized as the 426th largest publicly traded company
in America by Fortune magazine and then in December,
GameStop was added to the Standard and Poor’s 500
Stock Index. Considering that we only became public in
2002, we are justifi ably proud of the explosive growth
achieved in such a short period of time. I take particular
pride in the many GameStop leaders who have helped us
reach this milestone.
In February 2008, the Wall Street Journal analyzed
1,000 U.S. companies spanning 75 industry groups to
assess those generating superior and consistent returns
for shareholders. GameStop was ranked as the top
performing specialty retailer, the 22nd best performer
overall in 2007 and the 13th best performer over the past
three-year period.
WHAT’S AHEAD
IN 2008?
With the video game business continuing to grow and
the installed base of console users at an all-time high,
GameStop is very bullish on our overall potential both
domestically and internationally. The following are some
of the reasons for that outlook:
A Great Lineup of Titles. The new video game titles
scheduled to be released in 2008 may be among the
strongest, most diverse ever. We are looking forward
to blockbuster titles spanning all genres, including
Nintendo’s Super Smash Bros. Brawl, Take-Two’s
Grand Theft Auto IV, Electronic Arts’ Madden NFL 2009,
Nintendo’s Wii Fit, Microsoft’s Gears of War 2 and
Konami’s Metal Gear Solid 4 which are sure to be at the
top of many gamers’ wish lists in 2008.
HIGHLIGHTS: