GameStop Corp. (NYSE: GME) missed analysts’ expectations for both revenue and earnings for the third quarter of 2019, sending the stock crashing 17% in aftermarket hours on Tuesday.
Total sales of $1.4 billion were down 25.7% from the same period last year and below estimates of $1.6 billion. Comparable store sales decreased 23.2%.
On a GAAP basis, net loss was $83.4 million, or $1.02 per share compared to a loss of $488.6 million, or $4.78 per share, last year. Adjusted net loss from continuing operations was $40.2 million, or $0.49 per share. Analysts had forecast adjusted EPS of $0.11.
CEO George Sherman said, “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.”
New hardware sales decreased 45.8%, reflecting anticipated next generation console launches in 2020. New software sales fell 32.6%, as growth in Nintendo Switch software titles was more than offset by weaker title launches across other consoles.
Accessories sales declined 13.4% and pre-owned sales dropped 13.3% with declines in hardware and software. Collectibles sales rose 4.3%, with growth in domestic and international stores.
For fiscal year 2019, the company updated its guidance and now expects comparable store sales to decline in the high teens. Adjusted EPS is expected to be $0.10-0.20.
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