GameStop Gives Downbeat Financial Guidance
March 24 2016 - 6:00PM
Dow Jones News
GameStop Inc. on Thursday posted better-than-expected earnings
for its fourth quarter but issued downbeat guidance for the current
three-month period and fiscal year, as the videogame retailer
undergoes a rocky transformation amid the growing prevalence of
product downloading.
Shares of the videogame retailer, which have fallen 26% over the
past year, fell 7.8% after hours to $27.84
The Grapevine, Texas, company said it expects overall sales to
fall between 4% and 7% in the current quarter, with same-store
sales slipping between 9% and 7%. GameStop said it sees earnings
per share of between 58 cents and 63 cents.
Analysts surveyed by Thomson Reuters had expected overall sales
to rise 1% and earnings of 71 cents a share.
For the 2016 fiscal year, the company expects per-share earnings
of between $3.90 and $4.05 and revenue to be flat to up 3%.
Analysts expect earnings of $4.08 a share and a revenue increase of
3%.
In the fiscal year ended Jan. 30, GameStop reduced its overall
retail videogame-store count by 125 locations, but expanded its
technology brands segment that sells mobile phones and other
electronics by 553 stores. The latter is critical to the retailer's
efforts to wean itself off the legacy videogame business that, with
each passing year, sees more action move online.
Overall, for the period ended Jan. 30, GameStop reported a
profit of $247.8 million, or $2.36 a share, compared with a
year-earlier profit of $244.1 million, or $2.23 a share. Excluding
certain items, profit rose to an adjusted $2.40 a share from $2.15
a year earlier.
Revenue rose 1.4% to $3.52 billion.
The company had earlier said sales for the quarter would be in
the range of $3.5 billion to $3.55 billion, with earnings per share
of $2.19 to $2.25.
Sales at comparable stores grew 3.1%. Same-store sales were
expected to grow 2.5% to 4%.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
March 24, 2016 17:45 ET (21:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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