GameStop Corp. (NYSE: GME) reported fiscal third-quarter financial results after markets closed Tuesday. The company posted $0.54 in earnings per share (EPS) and $1.99 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $0.43 in EPS and $1.96 billion in revenue. The same period from last year had $0.49 in EPS and $1.96 billion in revenue.
During the quarter, consolidated comparable store sales growth totaled 1.9% (up 0.6% in the U.S. and up 4.6% internationally). New hardware sales increased 8.8%, led by demand for Nintendo Switch, and new software sales increased 5.4% driven by a strong title lineup. Pre-owned sales declined 2.4%. Worldwide omnichannel sales increased by 38.6% on the strength of new hardware sales.
Collectibles sales increased 26.5% to $138.4 million, driven by continued expansion of licensed merchandise offerings both domestically and internationally. The Collectibles business is on track to meet its 2017 revenue target of $650 million to $700 million.
In terms of the outlook for the full year, the company reiterated guidance of EPS in the range of $3.10 to $3.40 and comparable store sales increasing in the low-to-mid single digits. There are consensus estimates calling for $3.31 in EPS and $8.77 billion in revenue for the full year.
On the books, cash and cash equivalents totaled $454.7 million at the end of the quarter, versus $356.1 million at the end of the same period from last year.
Dan DeMatteo, interim CEO, commented:
Our third quarter sales results were driven by strong software demand and continued momentum for Nintendo Switch and collectibles. As we enter the fourth quarter, we are encouraged by the initial customer response to Microsoft’s Xbox One X, and believe that the holiday season results will be driven by new console hardware and collectibles. Our Technology Brands AT&T Wireless business underperformed our expectations for the third quarter and we anticipate that the fourth quarter results will be highly dependent on the availability of Apple’s next-generation iPhone X.
Shares of GameStop closed Tuesday at $16.65, with a consensus analyst price target of $22.05 and a 52-week range of $15.85 to $26.85. Following the release of the earnings report, the stock was initially up over 10% at $18.33 in the after-hours trading session.