GameStop Reports Lower Holiday Sales
GRAPEVINE (AP) - Shares of GameStop Corp. tumbled Tuesday after the world's largest video game retailer reported lower holiday sales and said its fourth-quarter earnings would be at the low end of its guidance.
The Grapevine, Texas-based company said its sales at stores that have been open for at least a year declined 4.4 percent. This measure is an important measure of a retailer's health because sales at recently opened or closed stores can skew results.
Total sales for the nine-week holiday shopping that ended on Dec. 29 fell nearly 5 percent from a year earlier, to $2.88 billion.
GameStop said it expects fourth-quarter earnings per share to be at the low end of its current guidance. The company said in November that it expects net income of $2.07 to $2.27 per share.
Analysts, on average, are expecting earnings of $2.16 per share, according to a poll by FactSet.
Weak holiday sales are concerning for GameStop because video game companies rely on the holiday season for a lot of their revenue.
"Our successful Wii U launch, strong digital growth and continued momentum in the mobile space were countered by a decline in store traffic," said CEO Paul Raines in a statement.
Shares of GameStop fell $1.67, or 6.8 percent, to $23.08 in morning trading. The stock has traded in a 52-week range of $15.32 and $28.35.
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