"2005 was an exceptional year for GameStop and ourshareholders," R. Richard Fontaine, the company's chairman andchief executive officer, said in announcing the year end and fourthquarter numbers. "We achieved record sales, increased grossmargins, and kept expenses well under control in the midst ofexplosive growth."

While some retailers struggled during the holiday season,GameStop reported that fourth-quarter sales increased 135.2% to$1.67 billion, more than twice the $708 million in sales in duringthe same November to January period in the last fiscal year. Netincome rose to $85 million, or $1.10 per share, during thequarterly period. For fiscal 2005, sales were up 67.8%, growing tomore than $3 billion from just north of $1.8 billion in 2004. Salesat comparable stores, a key measure of performance, decreased 1.4%during fiscal 2005.

Company execs predict even better numbers in fiscal 2007 withsales expected to rise between 14% and 17% with comparable storesales increasing from 6% to 9% during the period and earnings of$1.83 to $1.93 a share. During the first quarter, earnings areprojected to be between 4 cents and 5 cents a share. Same-storesales for the period are expected to be 7% to 9% lower, dueprimarily to the launch of Sony's PSP hand-held game console inthat prior-year quarter, company officials said.