GameStop 2008 Annual Report Download - page 51

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January 31, 2009 increased by 35.5% compared to the 52 weeks ended February 2, 2008, driven by strong sales of
new video game software and used video game products and their related accessories, as well as the leveraging of
selling, general and administrative expenses.
Canada
Sales in the Canadian segment in the 52 weeks ended January 31, 2009 increased 15.9% compared to the
52 weeks ended February 2, 2008. The increase in sales was primarily attributable to increased sales at existing
stores and the additional sales at the 58 stores opened since February 3, 2007. As of January 31, 2009, the Canadian
segment had 325 stores compared to 287 stores as of February 2, 2008. The increase in sales at existing stores was
driven by strong sales of new video game software related to the continued expansion of the installed base of new
hardware platforms. Segment operating income for the 52 weeks ended January 31, 2009 decreased by 8.9%
compared to the 52 weeks ended February 2, 2008. The decrease in operating income when compared to the prior
year was due primarily to a lower gross margin percentage driven by economic issues and competitive issues
stemming from changes in foreign exchange rates. For the 52 weeks ended January 31, 2009, changes in exchange
rates when compared to the prior year had the effect of decreasing operating earnings by $2.7 million.
Australia
Segment results for Australia include retail operations in Australia and New Zealand. As of January 31, 2009,
the Australian segment included 350 stores, compared to 280 stores as of February 2, 2008. Sales for the 52 weeks
ended January 31, 2009 increased 23.6% compared to the 52 weeks ended February 2, 2008. The increase in sales
was due to higher sales at existing stores and the additional sales at the 133 stores opened since February 3, 2007,
including the eight New Zealand stores acquired from The Gamesman Limited during July 2008. The increase in
sales at existing stores was due to a strong video game software title lineup and the availability of the new hardware
platforms in fiscal 2008 when compared to the prior fiscal year following the launch of the Sony PlayStation 3 in the
first quarter of fiscal 2007. In addition, the new hardware platforms drove an increase in used product sales as the
installed base of platforms increased and more software became available. Segment operating income in the
52 weeks ended January 31, 2009 increased by 12.0% when compared to the 52 weeks ended February 2, 2008. The
increase in operating earnings for the 52 weeks ended January 31, 2009 was due to the higher sales and related gross
margin offset by the higher selling, general and administrative expenses associated with the increase in the number
of stores in operation and the unfavorable impact of changes in exchange rates since the prior year. For the 52 weeks
ended January 31, 2009, changes in exchange rates when compared to the prior year had the effect of decreasing
operating earnings by $4.0 million.
Europe
Segment results for Europe include retail operations in 13 European countries including France, in which we
commenced operations on November 17, 2008 as a result of the Micromania acquisition. As of January 31, 2009,
the European segment operated 1,201 stores, compared to 636 stores as of February 2, 2008. For the 52 weeks ended
January 31, 2009, European sales increased 66.9% compared to the 52 weeks ended February 2, 2008. The increase
in sales was primarily due to the additional sales at the 754 stores opened since February 3, 2007, including the 328
stores from the Micromania acquisition and the 49 stores acquired from Free Record Shop Norway AS, a
Norwegian private limited liability company (“FRS”), in Norway during the first quarter of fiscal 2008 and the
increase in sales at existing stores. The increase in sales at existing stores was due to strong sales of new video game
software and the availability of the new hardware platforms in fiscal 2008 when compared to the prior fiscal year
following the launch of the Sony PlayStation 3 in the first quarter of fiscal 2007. In addition, the new hardware
platforms drove an increase in used product sales as the installed base of the platforms increased and more software
became available.
The segment operating income in Europe for the 52 weeks ended January 31, 2009 increased to $65.6 million
compared to $32.6 million in the 52 weeks ended February 2, 2008. The increase in the operating income was driven
by the increase in sales and related margin dollars discussed above, the earnings generated by the Micromania stores
and the continued maturation of our operations in the rest of the European market, offset by the unfavorable impact
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