GameStop missed Wall Street forecasts with plummeting first-quarter sales, although EPS beat the Street.
The nation’s largest video game retailer reported net sales of $1.55 billion, down 13% from $1.78 billion the prior-year period and beneath Wall Street predictions of $1.67 billion. Decreases in sales of new hardware and software, as well as pre-owned sales and digital receipts offset sales growth in collectibles and accessories.
Net income totaled $7.5 million, down 64% from $20.4 million in the first quarter of fiscal 2018. However, EPS of $0.07 surpassed analyst expectations of a $0.02 per share loss. Consolidated same-store sales fell 10.3%.
George Sherman, CEO of GameStop, said he has been reviewing the business since coming on board in April.
“We believe we will transform the business and shape the strategy for the GameStop of the future,” said Sherman. “This will be driven by our go-forward leadership team that is now in place, a multi-year transformation effort underway, a commitment to focusing on the core elements of our business that are meaningful to our future, and a disciplined approach to capital allocation.”
For full fiscal 2019, GameStop is forecasting negative sales growth and same-store sales growth of 5%-10%, and capital expenditures of $100 million-$110 million.