GameStop’s gross profit from collectibles in Q3 ended Oct. 28 rose 38.1% to $52.7 million on a 26.5% rise in revenue to $138.4 million driven by an expended selection of licensed products, the company said.

With the Q3 earnings, GameStop expects to hit its year-end forecast for collectible sales of $650-700 million, up from about $500 million a year ago. Collectibles were 6.9% of GameStop’s Q3 sales, up from 5.6% a year earlier.

The gains in collectibles came as GameStop expanded the number of stores with equal display space for videogames and collectibles to 200 locations, about 25% of which are in international markets, GameStop’s Tony Bartel told analysts. A larger number of GameStop’s 3,669 other U.S. stores have doubled the space allocated to collectibles. GameStop closed 18 stores in the Q3, but opened three ThinkGeek locations to end the quarter with 102 standalone collectible stores.

“Despite less space going to video games and more to collectibles, we are seeing an increase in videogames sales,” says GameStop’s Michael Mauler. “That has to do with the new customers that collectibles bring  into the stores that previously may not have purchased videogames.  Now they come in to buy collectibles and if we can get them to sign up for our loyalty program, we can sell them games later.”

In seeking to expand its merchandise mix, ThinkGeek’s research and development group has sourced and released 1,000 private label licensed products this year, company executives said.  GameStop also opened three-sided Pokemon Center displays in its stores on Nov. 19, stocking them with a range of licensed and direct-to-retail (DTR) products including trading cards, a Pikachu jumbo plush and Poke Ball serving bowls and travel cases. The addition of Pokemon Centers marks the first time the displays have been installed in stores outside Japan, GameStop said.

Overall, GameStop’s Q3 net income rose 16.9% to $59.4 million as revenue edged up 1.5% to $1.99 billion on a 1.9% gain in same-store sales. The increased revenue was led by sales of new videogame titles, which increased 5.4% to $649.9 million. On the videogame hardware side, revenue rose 8.8% to $305.6 million led by Nintendo’s Switch console and Microsoft Xbox One X device, the latter having sold out within the first two days of launch earlier this month, Bartel said.

Contact:

GameStop, Robert Lloyd, Chief Financial Officer, 817-424-2000, robert.lloyd@gamestop.com

GameStop, Tony Bartel, CEO, 817-424-2000, tony.bartel@gamestop.com

GameStop, Michael Mauler, EVP GameStop International, 817-424-2000, michael.mauler@gamestop.com