GameStop Corp.(NYSE:GME) stock lost over 10.9% on Jan 12th, 2018 (As of 12:40PM EST; Source: Google finance) post their holiday season performance.
The group forecasts non-cash impairment charges in the range of $350 million to $400 million, primarily related to its Technology Brands business. The impairment charges on the back of the negative impact of a longer upgrade cycle for new mobile devices and the changes made by AT&T to the compensation structure in 2017.
They are aiming to deliver adjusted earnings per share near the middle of their earlier full-year 2017 guidance of $3.10 to $3.40. Comparable store sales would grow between four and six percent for FY17 against the comparable fifty-three-week period. Gamestop continues to expect fiscal 2017 adjusted operating earnings for its Technology Brands business to be in the range of $75 million to $90 million.
As per the holiday sales performance, total global sales for the holiday period reached $2.77 billion, a 10.6% increase against the 2016 holiday period. Total comparable store sales surged 11.8%, growing 13.7% in the U.S. and 7.9% internationally. Worldwide omnichannel sales enhanced 21.5%.
New hardware sales rose 38.3%, boosted by Nintendo Switch and the launch of Microsoft’s Xbox One X. Sales of new video game software enhanced 7.3%, drive by Activision’s Call of Duty: WWII and continued strength in Nintendo Switch titles. Video game accessories sales grew 33.7%, primarily related to demand for Nintendo Switch accessories.
With regards to Non-Physical Gaming Business Update, Collectibles sales enhanced 19.4% to $211.3 million, boosted by apparel and toys. Digital sales and non-GAAP digital receipts enhanced 36.7% and 6.7%, respectively, excluding the 2016 holiday period revenues from Kongregate which was divested in July 2017. On a reported basis, digital sales increased 4.6%, whiles non-GAAP digital receipts increased 2.2%.
Technology Brands sales, which are not included in comparable store sales, decreased 18.6%, driven by limited availability of the iPhone X and changes made by AT&T to the compensation structure in 2017.
For the third quarter of 2017, the group’s global sales enhanced 1.5% to $1.99 billion (flat in constant currency), while comparable store sales enhanced 1.9% (+0.6% in the U.S. and +4.6% internationally). New hardware sales surged 8.8%, boosted by demand for Nintendo Switch, and new software sales rising 5.4% driven by a strong title lineup