Tags: GameStop | Stock | shares | price

GameStop Stock Plunges on Drop in Same Store Sales

Tuesday, 08 Jan 2013 10:19 AM

 

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Shares of GameStop Corp. tumbled Tuesday after the world's largest video game retailer reported lower holiday sales and said its fourth-quarter earnings would be at the low end of its guidance.

The Grapevine, Texas-based company said its sales at stores that have been open for at least a year declined 4.4 percent. This measure is an important measure of a retailer's health because sales at recently opened or closed stores can skew results.

Total sales for the nine-week holiday shopping that ended on Dec. 29 fell nearly 5 percent from a year earlier, to $2.88 billion.

GameStop said it expects fourth-quarter earnings per share to be at the low end of its current guidance. The company said in November that it expects net income of $2.07 to $2.27 per share.

Analysts, on average, are expecting earnings of $2.16 per share, according to a poll by FactSet.

Weak holiday sales are concerning for GameStop because video game companies rely on the holiday season for a lot of their revenue.

"Our successful Wii U launch, strong digital growth and continued momentum in the mobile space were countered by a decline in store traffic," said CEO Paul Raines in a statement.

Shares of GameStop fell $1.67, or 6.8 percent, to $23.08 in morning trading. The stock has traded in a 52-week range of $15.32 and $28.35.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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