Fourth quarter diluted earnings per share are expected to range from $1.53 to $1.59, representing EPS growth of 40% to 45%.

Fiscal 2006 Guidance

For the full year fiscal 2006, the management continues to believe that sales will grow 15% to 17% on a pro forma basis with comparable store sales increasing between 7% and 9%.

The firm now expects fully diluted earnings per share for the full year to range from $1.98 to $2.04, narrowing the guidance from last quarter by bringing the lower end of the range up by 4 cents.

The guidance includes projected stock-based compensation expenses of 17 cents per share for fiscal 2006. In addition, the guidance does not include merger costs related to the business combination, which were 5 cents per share for fiscal 2006, nor debt retirement costs, which could range from 3 cents to 5 cents per share for fiscal 2006.

Key questions and answers from the third quarter fiscal 2006 earnings call conducted by GameStop Corp. on November 21, 2006.

Could you give an idea on how much visibility you have on the new console follow through delivers and whether or not that information changes your forecast for full year shipment of PS3 and Wii?

On the Wii, the firm has anticipated deliveries much through December. On the PS3, the firm is getting information on a weekly basis.

This doesn’t change the firm’s financial forecast and the firm had a conservative estimate of both the PS3 and the Wii all along. The shipments that the firm is seeing won’t affect its earnings guidance at all and it may effect the same store sales guidance slightly depending on how many PS3s actually ship.

The net pace of the store openings is a little slower than anticipated. Could you comment on the pace you expect in the fourth quarter? How many of those stores might be weighted towards US versus international? Are you still targeting 500 for next year?

The firm will hit the 400 number this year. The fourth quarter is little bit shorter and the firm tries not to open too many stores as it gets into December. Generally speaking, the store openings will be somewhat more tilted to the US then internationally not because the firm has in any manner shape or form backed off internationally. In fact, the firm has not backed off in any country. But, one of the things that the management has been discovering is that predominately due to the explosion of competing entities seeking space in malls, the mall space has been at a real premium. The firm therefore has not jumped in and not paid ridiculous amounts for space and instead it has stepped up an approach to go into to little bit larger locations and therefore the company could be a little bit light there. Also, the company has reorganized its real estate function completely through Germany and that probably has set it back somewhat. The company is still looking at 600 new stores next year and 100 closings, with a net of 500.

Could you run through the year-over-year sales growth on a pro forma basis for each of your segments?

The video game hardware increased 69%; new video game software increased 14%; used video game products increased 10% and other products decreased 6%.

The firm is seeing an influx in the used product in the store as the supply side is good. Do you anticipate that you could benefit in the fourth quarter or is that more of a first quarter benefit?

The benefit in sales on the used increase in inventory will come more in the first quarter than in the fourth quarter, that’s generally been the case as the gift giver is more focused on the newer product. Hence, it will be a downstream effect and it will affect the first quarter used sales.

Will the sales of used in the fourth quarter similar to the third quarter?

No, typically used is a lower percentage of sales in the fourth quarter particularly this year because of the hardware launches and hence used percentage as a total will go down. But absolute growth in used will increase probably more than it did in the third quarter. The firm will see improvement in the used growth rate and it won’t be able to keep up with the spectacular growth in the new hardware and new software.

Looking at next year, do you anticipate that the growth rate for used software sales will be in line with new or is it going to be a lower number? Could it be flat year-to-year?

It will probably grow slower than the new game business because the new game business is expected to explode next year with all of the titles as well as the increased installed base on the 360, PS3, Wii et cetera. Hence, the management has not put any numbers on that yet, but it will most likely be slower growth. It will be good growth, but it will be slower growth than what the new is.

How did new stores that were opened during the last 12 months performed relative to your expectations?