GameStop Corp. on Monday posted third-quarter results came in weaker than expected on lower new software and hardware sales and delays in store openings.

Shares plunged about 15% to $33.42 in early trading.

For the current quarter, GameStop projected earnings from $2.12 to $2.32 a share, while analysts polled by Thomson Reuters expected $2.37.

For the period ended October, sales at established stores—which includes sales at retail stores open for at least 12 months and online sales—fell 1.1%. The company's technology segment, which includes its business selling smartphones, tablets and other devices, isn't included in the figure.

The growing installed base of Microsoft's Xbox One and Sony's PlayStation 4 consoles has boosted sales of new games as well as used games. GameStop also has been diversifying its business, including its technology brands segment, which sells mobile phones and electronics in partnership with Apple Inc. and AT&T Inc.

Chief Executive Paul Raines said expectations for the full year—in the range of $3.66 to $3.86—haven't changed, pointing to a solid slate of new videogames coupled with contributions from AT&T, Apple and ThinkGeek businesses as well as in-store collectibles offerings expected to drive fourth quarter results.

For the third quarter, GameStop reported a profit of $55.9 million, or 53 cents a share, compared with $56.4 million, or 50 cents a share, a year earlier, when the company had more shares outstanding. The latest period included a penny in charges related to its recent acquisition of Geeknet and the technology brands segment expansion. Excluding such one-time items, per-share earnings were 54 cents compared with 57 cents. Revenue increased 3.6% to $2.02 billion.

GameStop had projected per-share earnings of 53 cents to 60 cents a share with sales from $2.09 billion to $2.18 billion.

Gross margin rose 280 percentage points.

GameStop has been rolling out its licensed merchandise and collectibles—or "loot"--business in the U.S. In the latest period, sales of collectible products drove a 61% increase in the company's "other" category.

The retailer is in the early stages of the rollout of the collectibles business, whose products carry a higher margin than videogames. GameStop expects the segment to grow to $500 million a year by the end of 2019.

The company in July completed its acquisition of GeekNet, parent of online retailers ThinkGeek and ThinkGeek Solutions-which Mr. Raines said provides an opportunity to expand the collectibles business with exclusives, such as "Star Wars" items as well as videogames.

ThinkGeek and ThinkGeek Solutions sells an assortment of clothing, gadgets and videogame-themed merchandise targeted at so-called geeks and hackers.

Technology Brands revenue surged 64.2% as the company continued to add new stores. In the latest quarter, 105 new stores were opened or acquired, though Mr. Raines noted there were delays in openings.

New software sales fell 9.3%, or 4.2% excluding currency impacts, due to a tough overlap of Destiny and Super Smash Bros. in the third quarter last year. GameStop's sales of preowned videogames, consoles and related equipment, which has been a profit driver for the retailer in recent years, edged up 0.6%, and rose 4.9% excluding currency impacts.

In September the company announced it planned to hire more than 28,000 seasonal workers for the holiday season, an increase of 12% from last year.

Write to Anne Steele at Anne.Steele@wsj.com

 

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(END) Dow Jones Newswires

November 23, 2015 10:05 ET (15:05 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
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