Dreadful numbers out of a dinosaur of a company.
Shares of $GME are being harangued this morning after the company missed and warned, without really explaining why they sucked so badly. Rest assured, their share buyback program of more than $175m is still in play, so maybe the stock will find a bottom soon.
Both software and hardware sales slid, but collectible were up — thanks to strong Pokémon sales.
As stated in the company’s holiday sales release in January, the fourth quarter was significantly impacted by weak sales of certain AAA titles and aggressive console promotions by other retailers on Thanksgiving Day and Black Friday. As a result, new hardware sales declined 29.1% and new software sales declined by 19.3%.
Pre-owned sales outperformed new video games, declining 6.7% compared to the fourth quarter of 2015.
Non-GAAP digital receipts declined 7.7%, to $373.4 million and GAAP digital sales declined 5.8%, to $57.2 million. Digital sales were impacted by the decline in new video game sales. Technology Brands sales, which are not included in comparable store sales, increased 43.9% to $256.0 million, primarily driven by year-over-year store growth. Technology Brands adjusted operating earnings were $34.0 million, an 88.9% increase compared to $18.0 million in the prior-year quarter. On a GAAP basis, operating losses were $12.0 million due to store rationalization and asset impairment charges recorded during the fourth quarter.
Collectibles sales rose 27.8% to $212.4 million, driven by strong sales of Pokémon-related toys and apparel. The company added 17 Collectibles stores during the quarter, bringing the total global portfolio to 86 stores, including 24 ThinkGeek stores in the U.S.
Co issues guidance for FY18, sees EPS of $3.10-3.40 vs. $3.72 Capital IQ Consensus Estimate; sees FY18 revs of (2)-2% to ~$8.44-8.78 bln vs. $8.65 bln Capital IQ Consensus Estimate.
“Going forward, GameStop will provide annual guidance, and no longer provide quarterly EPS or same store sales guidance. We believe that providing only annual guidance will reduce investor distraction as we continue to diversify the company and seek to maximize long-term shareholder value. It also benefits our organization in that it concentrates attention on longer-term targets and reduces the focus on short-term results, which can be volatile given the current business environment.”For the full year, GameStop repurchased 3.01 million shares at an average price of $24.94, or $75.1 million of stock. As of today, there is $170.2 million remaining on the existing repurchase authorization. consolidated comparable store sales declined 16.3% (-20.8% in the U.S. and -4.6% internationally).
The mall is dead and so is gaming, apparently.
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All games being bought via downloadable methods. Game developers putting out their own software to launch their games through, incomplete games being put out and bought up with pay for play and DLC added within weeks afterwards for an additional cost. Gaming is bigger than ever – livestreams getting more and more popular, but the brick and mortar just doesn’t serve a purpose.
Yes most games bought now direct through the console, good for ea and blizzard terrible for Best Buy and mostly GameStop.
All the hipster gamers are too busy rioting
GME, my old friend. I bought at the behest of the Motley Fool bros and rode a four-bagger and sold around $30 only to watch in horror as it shot to $60. Got smug when same-store sales fell off a cliff along with the stock price. Thought about another go when they focused on used games and console sales but didn’t pull trigger. Watched in horror as it shot up to $50. Saw writing on wall re downloadables and mobile gaming which decimated stock price. Just die already. No Q reporting? Death knell even with current huge divvy. Target price $10.