GameStop Earnings and Guidance Fail to Meet Expectations

By Chris Lange Updated Jan 13, 4:52PM EST · Published Nov 23, 9:34AM EST

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GameStop Corp. (NYSE: GME) reported its third-quarter financial results before the markets opened on Monday. The company had $0.54 in earnings per share (EPS) on $2.02 billion in revenue versus consensus estimates from Thomson Reuters that call for $0.59 in EPS on $2.14 billion in revenue. The same period from the previous year had $0.57 in EPS on $2.09 billion in revenue.

Total global sales decreased 3.6%, a 1.2% increase in constant currency, and consolidated global comparable store sales declined 1.1%. Foreign exchange (FX) rate changes negatively impacted sales by roughly $100 million and EPS by $0.02.

During the third quarter, the company repurchased $44.9 million of common stock at an average price of $43.85 per share, leaving $295.4 million on the existing repurchase authorization.

In terms of guidance, GameStop expects comparable sales to range from -1.0% to +6.0% and EPS in the range of $2.12 to $2.32. There are consensus estimates that call for $2.37 in EPS on $3.67 billion in revenue.

Paul Raines, CEO of GameStop, commented on earnings:

Our third quarter results were at the low end of our guidance range due to lower than expected new software and hardware sales and delays in Technology Brands store openings; however, our expectations for the full year have not changed. Looking ahead to the fourth quarter, a solid slate of new video games, coupled with contributions from our diversified AT&T, Apple and ThinkGeek businesses and our in-store collectibles offerings are expected to drive our fourth quarter results; therefore, we are reiterating our full year earnings per share guidance range of $3.66 to $3.86.

On the books, cash and equivalents totaled $186.2 million at the end of the third quarter compared to $374.0 million at the same period from the previous year.

Shares of GameStop closed Friday up 2.1% at $39.26, with a consensus analyst price target of $50.90 and a 52-week trading range of $31.69 to $47.83. Following the release of the earnings report, shares were down over 18% at $32.00 in early trading indications on Monday.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.