GameStop profit misses estimates, shares down by 11 percent
GameStop shares dropped Thursday after the Texas based company posted third-quarter profit below expectations, in addition to downgrading its outlook for the fiscal year.
The company posted adjusted profit of 57 cents per share in its fiscal third quarter, below what Wall Street analysts has forecast of 62 cents per share, according to Zacks Investment Research.
Sales also missed expectations, with the video game retailer posting sales of $2.09 billion, below expectations of $2.21 billion.
According to GameStop the delayed release of the video game “Assassin’s Creed Unity” affected its sales for the quarter.
It cut its expected per-share earnings for the year from $3.40 to $3.70 per share down to $3.40 to $3.55.
Sales at stores that have been open for at least a year are expected to rise only 2 percent to 5 percent, far lower than its previous outlook of a 6 percent to 12 percent increase.
GameStop CEO Paul Raines, commented on the results:
“Overall, most of our major product categories performed very well, but our third quarter results were impacted by Assassin’s Creed Unity moving out of October,”
“As we look at the holiday quarter, we are focused on relentlessly applying our competitive advantages: convenience, strong CRM, knowledgeable associates and value through our unique forms of currency, which include buy-sell-trade and the new PowerUp Rewards credit card, to deliver a successful quarter.”
GameStop shares dropped by 11 percent, or $4.82, to $39.05 in extended trading.