This summary is based on the first quarter fiscal 2007 earnings call conducted by GameStop, Corp. (GME: chart) on May 23, 2007.

Chairman and Chief Executive Officer: R. Richard Fontaine
Vice-Chairman and Chief Operating Officer: Daniel A. DeMatteo
Chief Financial Officer, Executive Vice President and Assistant Secretary: David W. Carlson

Key Investors Issues

- Earnings per share increased by 111% from a year ago.
- Quarterly sales increased 23% to $1.28 billion versus $1.04 billion in the prior year quarter.
- Second quarter comparable store sales are expected to increase 16% to 18%.

First Quarter Highlights

Diluted earnings per share were 15 cents including 3 cents for debt retirement costs.
- This was 2 cents per share higher than the high-end of the guidance issued in mid-March.

The company had cash exceeding $300 million at the end of the quarter.

- Inventories grew 25% from the prior year, inline with the sales growth experienced during the quarter and partially due to increased hardware shipments near the end of April.
- The company has so far in fiscal 2007 repurchased $150 million of notes, completing the authorization the Board approved in February 2007.

Comparable store sales rose 15.3%.

- This was driven by the demand for next generation hardware and the continued popularity of the PS2 console and its related new and used games.
- Video game hardware grew 75%, and video game software grew 13%.

The company sold a wide range of products to a widening group of game players.

These players include the avid gamers, the casual gamers and budget-oriented consumers that buy last cycle games in systems. The systems on demand include the original Xbox, the Nintendo product lineup, the Wii, the DS light system, DS games, Pokemon Diamond and Pearl.

Sales were also driven by demand for the 6-year old PS2 system. Nationwide, almost the same number of these units sold in the first quarter compared to last year.

The PSP price reduction in March helped fuel sales of Sony’s hand-held system during the quarter, as the sustainable sales lift doubled after the change. Used business, which grew 18% in the quarter, also drove first quarter sales.

The company is improving platform-diversification to provide something for everyone.

- In one week, the top 25 best sellers in software were represented by six different platforms.
- Hardware sales of $1 million were made in six different platforms in a week.
- The price of PSP has dropped $30 and the company has introduced 360 Elite with $479 price point.

During the quarter the company opened 86 new stores while closing 48. - 29 of these were in Spain, while the others were buy and large overlap stores.

GameStop has come a long way in five years as a public company.

It was officially listed as a Fortune 500 company and the 18th best company on that list for coming in at 73.2% on the past year’s total return to investors. In Barron’s best companies for 2006 GameStop was listed at position 16, when measured on the 52-week total return versus the Standard & Poor’s 500, the three-year cash flow return on investment and total sales growth.

- The company had 4,816 stores at the end of the first quarter after having opened stores in Portugal, making it the 16th country where GameStop now does business.
- The company has also been improving its operations and maximizing its re-branding efforts. To-date, it has re-branded 500 stores from EB to GameStop in the US.

Fiscal 2007 Outlook