GameStop Corp. (NYSE: GME) released fiscal third-quarter financial results after markets closed Tuesday. The video game retailer said that it had a net loss of $0.49 per share and $1.44 billion in revenue, while consensus estimates had called for $0.11 in earnings per share (EPS) and $1.62 billion in revenue. The same period of last year reportedly had $0.49 in EPS and $2.08 billion in revenue.
During the third quarter, total global sales decreased by 25.7% (24.7% in constant currency), resulting in a consolidated comparable store sales decrease of 23.2%.
In terms of its segments, the firm reported:
- New video game hardware net sales decreased 45.8% year over year to $189.0 million.
- New video game software net sales decreased 32.6% to $485.9 million.
- Pre-owned and value video game products net sales decreased 13.3% to $344.2 million.
- Video game accessories net sales decreased 13.4% to $156.5 million.
- Digital net sales decreased 18.5% to $37.0 million.
- Collectibles net sales increased by 4.3% to $161.2 million.
Looking ahead to the 2019 fiscal full year, the company expects to see EPS in the range of $0.10 to $0.20 and a comparable store sales decline in the high-teens. Consensus estimates are calling for $1.21 in EPS and $7.17 billion in revenue for the fiscal full year.
George Sherman, GameStop’s CEO, commented:
Our third quarter results continue to reflect the prevailing industry trends, most notably the unprecedented decline in new hardware sales seen across the market as the current generation of gaming consoles reach the end of their lifecycle and consumers delay their spending in anticipation of new hardware releases. With console makers set to introduce new and innovative gaming consoles late next year, we anticipate this trend to continue until the fourth quarter of 2020. Despite the current top-line trends, we are pleased with the continued strong progress that we are making against our strategic initiatives as we transform GameStop for the future. We remain on track to achieve our $200 million annualized operating profit improvement goal, by 2021 and we believe our strategic initiatives will enable to us to achieve our long-term growth and profit objectives as we fully leverage our unique leadership position and brand in the video game space.
Shares of GameStop closed Tuesday at $6.51, in a 52-week range of $3.15 to $16.90. The consensus price target is $4.97. Following the announcement, the stock is down 21% at $5.13 in the after-hours trading session.
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