Tex.-based retailer GameStop reported a slight sales increase for its fiscal third quarter, but the firm lowered guidance on global economic decline.

Sales for the quarter ended November 1 were Kris Graft.7 billion, a 5 percent year-on-year increase, but below analyst estimates of Kris Graft.84 billion.

The firm said comparable store sales were down 1.8 percent year-on-year due to a tough comparison to last year"s Halo 3 launch.

Net earnings were down to $46.7 million from $52 million a year ago, and diluted earnings per share were 28 cents, down from 31 cents in 2007. GameStop cited foreign exchange rates and merger-related expenses as reasons for the drop.

During the quarter, GameStop purchased French chain Micromania, and reported Kris Graft6.6 million in merger-related expenses. The total cost of the Micromania buy was reduced to $636 million from the originally-announced $700 million due to fluctuating foreign exchange rates.

New videogame sales were up 10 percent. GameStop said the top five new sellers during the quarter were Madden NFL 09, The Force Unleashed, Fable 2, Wii Fit and Guitar Hero World Tour.

CEO Dan DeMatteo said, "Despite the dramatic decline of the global economy and its severe impact on the entire retail industry, GameStop had a strong quarter."

Although GameStop was able to come out of an economically tumultuous Q3 relatively unscathed, the firm decided to reduce Q4 earnings guidance to range from Kris Graft.29 to Kris Graft.34, which would be an increase of 13-18 percent over the prior year.

GameStop cited "weakness in consumer spending," increased sales of lower-margin new titles and a drop in videogame hardware prices.

Full-year earnings per share are projected to range from $2.35-$2.40, down from the most recent full-year earnings per share forecast of $2.45-$2.50. Comparable store sales are expected to increase between 10 and 11 percent during the year, down from previous estimates of a 12-14 percent increase.

Moving into GameStop"s Q4, DeMatteo said sales are already "robust," thanks to Call of Duty: World at War, World of Warcraft: Wrath of the Lich King and Gears of War 2.

Chairman and former CEO R. Richard Fontaine added, "While we are operating through what has been the most unpredictable economic environment in my over 40 years in retail, the GameStop business model has proven to be very resilient.

"New game sales were strong due in part to the values generated by many of our customers trading in products while older products are being sold at value price points."

GameStop shares were down 7.76 percent to Kris Graft9 in morning trading on the Nasdaq.