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GameStop Corp. Message Board

  • gamesarereallyfun gamesarereallyfun Dec 21, 2002 10:14 AM Flag

    GME or ELBO?

    Both have been hammered - which (if either) to buy?

    Quarter ending 11/02:

    ELBO Sales 282M, Gross margin 23.3% Net Income 2.5%, Cash 67M

    GME Sales 286M, Gross margin 25.5%, Net Income 3.4%, Cash 125M

    * Neither company has any long-term debt to speak of - huge plus to both companies.
    * Both have excellent sales trends. I believe the Q4 declines in comp store sales are a one-time event and are due to the launch of three consoles in this quarter last year (Xbox, GameCube, GameBoy Advance).
    * Despite the postings on this board and the GME board, the stores are virtually identical in content and appearance. If blindfolded until entering, I don't believe 1 in 10 average consumers could tell if they were in a GME store or an ELBO store. The big difference is that GME focuses more on "preowned" merchandise than ELBO - this is why GME is the more profitable of the two companies.

    Looks like both are a good risk, but I would give the edge to GME. I know there has been a great deal of ancedotal "evidence" on the ELBO board in favor of ELBO (ELBO stores are "better", they have more people shopping in them, etc.), but the numbers don't seem to support such statements.

    If I'm misreading any of the financial numbers, please point it out!

30.81-0.20(-0.64%)Jul 22 4:03 PMEDT