GameStop Corp. (GME) delivered stellar results again. Its second quarter sales were $104 million above the consensus forecast, and EPS beat the consensus estimate by $0.04, which is about 19x our 2009 EPS estimate.

Looking ahead, the management’s guidance for the second half of the year was in line with expectations. Unlike most other areas of retail, videogame sales remain strong. We believe this momentum will continue through next year. We are once again increasing our estimate. Our 2008 EPS estimate goes from $2.42 to $2.52 and our 2009 EPS estimate goes from $3.01 to $3.10. We maintain our Buy rating and our $60 target price.

We think the video game business is still in the early-to-middle stages of the current video game console cycle that includes the next-generation platforms Xbox 360, PlayStation 3, and Nintendo Wii. These next-generation systems require gamers to upgrade older systems in order to experience the