GameStop Corp. (NYSE: GME | GME Price Prediction) announcing solid sales for the holiday period sent its shares up handily on Monday morning. This video game retailer has struggled over the past few years, into the heart of the pandemic. However, GameStop hit its stride and is up over 300% over the past six months, and this holiday sales report will only add to this.
The specialty retailer offered somewhat mixed results for the nine-week period ended January 2. First, the company saw a 4.8% increase in comparable store sales and a 309% increase in e-commerce sales, which represented about 34% of total sales.
Note that worldwide e-commerce sales totaled $1.35 billion (fiscal) year to date, reaching past the company’s original growth objective of $1.0 billion.
On the other hand, total sales declined 3.1% to $1.77 billion, driven by an 11% decrease in the company’s store base due to its planned de-densification strategy, temporary store closures around the world and lower store traffic.
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Management believes the industrywide traffic decline during the holiday period adversely affected comparable sales for the nine-week period in the high single-digit to low double-digit percentage point range. Additionally, significant worldwide supply chain constraints had an impact on the ability to distribute products to customers across all sales channels. However, GameStop saw unprecedented demand for recently launched gaming consoles, and while consumer demand far outpaced constrained supply in the nine-week period, management believes these products will drive sales well into 2021 as console availability from suppliers improves later in the year.
Despite this update of holiday sales, GameStop still is suspending its guidance for the fiscal fourth quarter, which ends on January 30. Analysts are calling for $1.66 in earnings per share and $2.42 billion in revenue.
Excluding Monday’s move, GameStop stock had outperformed the broad markets with a gain of about 219% in the past 52 weeks.
GameStop traded up almost 16% to $20.50 early Monday, in a 52-week range of $2.57 to $22.35. The consensus price target is $10.90.
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