GameStop Corp. (NYSE: GME) reported third quarter 2016 results after markets closed on Tuesday. The video game retailer posted diluted earnings per share (EPS) of $0.49 on $1.96 billion in revenues. In the same period a year ago, the company reported EPS of $0.53 on revenue of $2.02 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.47 and $1.99 billion in revenue.
Consolidated same-store sales tumbled 6.5% in the third quarter compared with the same period a year.
For the fourth quarter of its fiscal year GameStop forecasts a same-store sales decrease in the range of -7% to -12% and diluted EPS of $2.23 to $2.38. For the full 2016 fiscal year Gamestop reiterated its prior EPS guidance of $3.65 to0 $3.80 and same-store sales down 6.5% to 9.5% for the year.
Analysts were looking for fourth-quarter EPS of $2.37 and revenues of $3.45 billion. The full-year forecast calls for EPS of $3.71 and revenues of $9.04 billion.
The company’s CEO said:
While the video game business has underperformed recently, we are focused on maintaining our leading market position, especially during the holiday season, as well as driving diversification through the growth of Technology Brands, Digital and Collectibles. In aggregate, despite the softness in video games, I’m proud that our team was able to increase total operating earnings by nine percent year-over-year. As we look forward, we believe that we are well positioned to continue to drive strong free cash flow and return value to shareholders through a combination of share repurchases and dividends.
New software sales declined 8.6% year-over-year while sales of used and value software dropped 6.5%. New hardware sales declined 20.6% year-over-year.
Shares traded up about 1.9% in after-hours trading Tuesday, at $24.80 in a 52-week range of $20.10 to $38.23. The consensus 12-month price target was $26.61 before results were announced.