GameStop Corp. (NYSE: GME) stock fell 2.79% on April 2nd, 2019 and continued its bearish momentum on April 3rd, 2019 (As of 12:58 PM EDT; Source: Google finance) after the company issued guidance that was lower than the analysts’ expectations. The company reported fourth-quarter the net losses of $187.7 million compared to the losses of $105.9 million in the year-ago period. As previously disclosed, the company had completed the sale of its Spring Mobile business on January 16, 2019 and the results of that business are included in discontinued operations for the fourth quarter and fiscal 2018 period.
GME in the fourth quarter of FY 18 has reported the adjusted earnings per share of $1.60, which is as per the analysts’ estimates for the adjusted earnings per share of $1.60, as per the analysts surveyed by FactSet. The company had reported 7.6 percent decline in the adjusted revenue to $3.06 billion in the fourth quarter of FY 18, missing the analysts’ estimates for revenue of $3.28 billion. The overall sales decline was primarily due to a decrease in pre-owned video game sales, new software sales, as key titles underperformed, and the impact of the 53rd week in fiscal 2017, which equated to roughly $130 million in sales. Excluding the extra week in 2017, sales decreased by 3.8% in the fourth quarter. Overall comp sales increased by 1.4% for the quarter. In the US, comp store sales increased 3.4% in the quarter while international comps decreased 2.9% for the quarter. Comp sales in the US outperformed international comp sales, primarily due to stronger hardware and software sales. The new video game hardware business decreased by 9.8% for the quarter and decreased by 1.3% for the year
Meanwhile, the grapevine that the company is trying to establish a presence in the growing world of esports, that features organized teams playing each other in leagues built around games like Overwatch. Last month, the company acquired naming rights to a new esports training facility being built on the grounds of the Dallas Cowboys headquarters.
The company expects the retirement of the $350 million in unsecured senior notes scheduled to mature in October 2019 to be completed by April 4, 2019. The company currently has $300 million available under the current share repurchase authorization.
For the first quarter, analysts model earnings of 17 cents a share and sales of $1.69 billion. Gamestop said it forecasts a 5% to 10% drop in sales for 2019 and losses of up to 5 cents a share for the first quarter. The company did not present a full-year earnings forecast. The company aims to achieve a $100 million improvement in operating profit this year.