GameStop, the largest specialty retailer of video games, gained the most in more than four years after raising its full-year profit forecast ahead of the release of new consoles from Sony and Microsoft.
The shares advanced 9 percent to $51.91 in Thursday's trading and during the session rose as much as 18 percent for the biggest intraday jump since December 2008. The stock, which through Wednesday had almost doubled this year, Thursday led the Standard & Poor's 500 Index higher.
GameStop is gaining market share, executives said on a conference call today with investors and analysts. That positions the retailer to capitalize on spending for titles such as Electronic Arts's (ERTS) "Battlefield 4" and "FIFA 14," and the release of Sony's PlayStation 4 and the Xbox One from Microsoft. Both consoles reach stores for the holidays.
"We are positioned well for the upcoming console launches and expect to be the dominant player during this cycle," J. Paul Raines, GameStop's chief executive officer, said on the call.
Sony's machine goes on sale in the U.S. on Nov. 15. Microsoft follows a week later, according to Michael Pachter, an analyst at Wedbush Securities in Los Angeles.
Profit for the fiscal year ending in January will be $3 to $3.20 a share, more than the May 23 forecast of $2.90 to $3.15 a share, the Grapevine, Texas-based retailer said Thursday in a statement. Comparable-store sales, which exclude new outlets, will range from a drop of 3.5 percent to a gain of 1.5 percent. In May GameStop predicted the sales would range from a drop of 5 percent to growth of as much as 1.5 percent.
Disney's "Infinity" interactive game is "off to a very strong start, exceeding our expectations," Tony Bartel, GameStop's president, said on the call.
Titles key to GameStop's performance in the current third quarter include "Grand Theft Auto V" from Take-Two Interactive Software Inc., Activision Blizzard Inc.'s "Skylanders: SWAP Force," and Nintendo Co.'s "Pokemon X&Y," Bartel said. He said GameStop expects to have more consoles available on the first day than it did when the last round of machines began selling.
Take-Two, based in New York, added 2.3 percent to $18.60. Activision, based in Santa Monica, California, gained 1.6 percent to $16.85.
GameStop's second-quarter profit fell 50 percent, as consumers curbed purchases before the new consoles debut.
Net income shrank to $10.5 million, or 9 cents a share, for the quarter ended Aug. 3, from $21 million, or 16 cents, a year earlier, the retailer said. That topped the 4-cent average of analysts' estimates compiled by Bloomberg.
Sales declined 11 percent to $1.38 billion from $1.55 billion a year earlier, beating the $1.35 billion average of analysts' estimates. The retailer, along with console producers and game publishers, has weathered a two-year drop in consumer spending as play on social networks and mobile phones grew in popularity.