Grapevine's GameStop says second-quarter earnings will be below Wall Street expectations
GameStop said Thursday that its second-quarter earnings will come in under Wall Street’s projections, but the company maintained its earnings expectations for the full year.
The Grapevine-based videogame retailer reported a $72.5 million net profit for the first quarter, which ended April 30, compared to $80.4 million for the same period the prior year. Earnings per share were 54 cents in the latest quarter, compared to 56 cents the prior year. Sales in comparable stores – those open at least a year, an industry benchmark – were down 12.5 percent for the quarter, in line with what GameStop disclosed on May 10.
The company's shares sank on the news in early morning trading, falling nearly 7 percent, or $1.42 a share, to $19.42.
GameStop said it expects second-quarter earnings of 10 to 18 cents per share. Wall Street is looking for 25.4 cents per share.
GameStop also said it continues to expect full-year earnings of $3.10 to $3.30 per share. Wall Street is looking for $3.19.
GameStop said May 10 that its first-quarter sales reflected “light demand for ‘AAA’ game launches and slower than expected traffic.”
“GameStop continues to outperform the market in new game sales through the late stages of this console cycle,” Paul Raines, GameStop’s chief executive, said in a release Thursday.
“Despite slower traffic during the quarter, we achieved our earnings target due primarily to gross margin expansion and positive profit contributions from our pre-owned, mobile and digital businesses. We expect those segments to fill the profitability gap as we transition to the new console cycle.”