GameStop reports massive losses for Q2

GameStop Corp. (NYSE: GME) missed revenue and earnings expectations for the second quarter of 2019, sending the stock crashing 16% in aftermarket hours on Tuesday.

Total global sales fell 14.3% year-over-year to $1.29 billion, missing estimates of $1.34 billion. On a constant currency basis, sales declined 13.1%. Consolidated comparable store sales were down 11.6%.

On a GAAP basis, net loss widened to $415.3 million, or $4.15 per share, from $24.9 million, or $0.24 per share, in the prior-year quarter, due to a goodwill impairment charge. Adjusted net loss from continuing operations was $32 million or $0.32 per share. Analysts had forecast a loss of $0.20 per share.

New hardware sales fell 41.1%, reflective of recent announcements for next generation console launches in 2020. New software sales dropped 5.3%, as growth in Nintendo Switch software titles was more than offset by weaker title launches across other consoles. 

Also see: GameStop Q2 2019 Earnings Preview

Accessories sales decreased 9.5%. Pre-owned sales declined 17.5% with declines in hardware and software. Digital receipts were down 11.2% to $227.2 million due to weaker title launches. Collectibles sales rose 21.2%, helped by strong double-digit growth in domestic and international stores.

For fiscal year 2019, GameStop expects comparable store sales to decline in the low teens. Adjusted EPS is expected to be $1.15-1.30.

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