Retail
GameStop Earnings Jump on Margin Growth; Fiscal Year Forecast Raised
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For the third quarter of its fiscal year, GameStop forecasts a same-store sales increase in the range of 1% to 4% and diluted EPS of $0.53 to $0.60. Last year the company posted EPS of $0.57 in the third quarter.
For the full year, GameStop raised its adjusted diluted EPS estimate of from a prior range of $3.63 to $3.83 to a new range of $3.66 to $3.86. Full-year same-store sales are now expected to improve by 2% to 7% for the year. Guidance for the current quarter and the full year includes only the effect of share repurchases through the end of the second quarter.
Consolidated same-store sales rose 8.1% in the second quarter compared with the same period a year. Same-store sales rose nearly 22% in the year-ago quarter.
The company’s CEO said:
During the second half of the year, we anticipate momentum in our core gaming business with the launch of several AAA titles, complementing growth in our pre-owned segment being fueled by a continuing shift to next-gen products. We also expect Technology Brands and collectibles products to contribute meaningful profits for the balance of the year.
New software sales declined 6% year over year, while sales of used and value software rose 0.5%. New hardware sales declined 2.2% year over year. Mobile and consumer electronics sales rose 26.9%.
Shares traded up about 4.3% in after-hours trading Thursday, at $48.20 in a 52-week range of $31.69 to $47.83. Thomson Reuters had a consensus analyst price target of $48.34 before the results were announced.
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