GameStop Falls on Q3 Figures, Guidance

GameStop Corp. (NYSE:GME) reported weaker-than-expected results for its third quarter. The company also cut 2019 adjusted earnings guidance from $1.15-$1.30 to $0.10-$0.20.

GameStop, out of Grapevine, Texas, reported Tuesday that total global sales decreased 25.7% to $1.4 billion, driven by a consolidated comparable store sales decrease of 23.2%.

New hardware sales decreased 45.8%, reflecting anticipated next generation console launches in 2020. New software sales decreased 32.6%, with growth in Nintendo Switch software titles more than offset by weaker title launches across other consoles in the quarter compared to last year.

GameStop’s third-quarter GAAP net loss was $83.4 million, or $1.02 per diluted share, compared to net loss of $488.6 million, or $4.78 per diluted share, in the prior-year quarter, which included the Spring Mobile business.

During the quarter, the company repurchased 22.6 million shares of its common stock, for $115.7 million, or an average price of $5.11 per share, bringing the year-to-date repurchase activity to $178.6 million for 34.6 million shares, or 34% of the shares outstanding, at an average price of $5.14 per share.

According to CEO George Sherman, "Our third-quarter results continue to reflect the prevailing industry trends, most notably the unprecedented decline in new hardware sales seen across the market as the current generation of gaming consoles reach the end of their lifecycle and consumers delay their spending in anticipation of new hardware releases.

"With console makers set to introduce new and innovative gaming consoles late next year, we anticipate this trend to continue until the fourth quarter of 2020."

GameStop slumped one dollar, or 15.3%, to $5.51