Game downgrades sales forecasts in “extraordinary economic times”

Total group sales were down 10.6% in the period, and Game said this performance was ahead of the overall video games market, which was down 12.3% in the same period.

In the most recent 7 week period group like-for-likes fell 2.9% while total sales dropped 4.9%. Game said it has retained a “market leading share on all major software titles”.

In the 41 week period UK and Ireland like-for-likes slumped 10.5% as total store sales dropped 13%.

International like-for-likes fell 6.8% while total store sales declined 8.4%.

Ecommerce sales were flat.

Game has revised down its targets on like-for-likes and margin improvement. At its last update on September 27, Game said it expected to achieve full year like-for-likes of -3% to 0%. It said it expected gross margins to decline 100 basis points and operating costs down £6m to £9m compared with last year.

Game now expects like-for-likes will be “no better” than -7%. It added that it will still be “over-performing the overall market”. It now expects gross margins will be down by at least 150 basis points and that operating costs will be £8 to £10 million lower than last year.

Game chief executive Ian Shepherd said: “The overall video games market remains very challenging, despite strong title launches, and our guidance today reflects the extraordinary economic times in which we are operating.

“Game has outperformed the market, reinforcing our position as market leader, and I am hugely proud of our teams.

“They remain focussed on delivering our strategy, controlling costs and driving operational cashflow, and we remain well placed to benefit in the medium term both from the next console cycle and the growth in digital and social gaming.”

Revenues across all categories - software, hardware, preowned and accessories – were down year-on-year in the 41 week period.

Game said major software titles are “launching in line with first week expectations, but are then seeing a quicker tail-off than historically experienced”.

Both footfall and basket sizes are down “reflecting wider consumer uncertainty”.

Game said it “continues to focus on delivering a further improvement in operating cash generation through strong working capital management, tight cost control and capital expenditure discipline”. 

Game added: “Combined with a robust balance sheet and available banking facilities, this means that the Group is well positioned for these difficult market conditions.”

 Game said that “despite the short term market challenges, the medium term strategy is making progress”. It said online margin has doubled since the launch of its new web platform. Game’s online share has remained at 19%.

Game’s store closure programme is on target. It has closed 37 stores this year