GameStop (NYSE: GME) reported its third quarter financial results during extended trading hours on Tuesday. The Company reported an unexpected earnings loss and missed revenue estimates, sending shares lower by 19% on Wednesday.
For the quarter, GameStop reported earnings loss of USD 0.49 per share on revenue of USD 1.44 Billion. Wall Street analysts expected earnings of USD 0.11 per share on revenue of USD 1.62 Billion.
GameStop reported that global sales decrease by 25.7% year-over-year, driven by a consolidated comparable store sales decrease of 23.2%.
The Company witnessed major declines across its segments, notably its hardware and software sales. Hardware sales decreased by 45.8%, while software decreased by 32.6% year-over-year.
Hardware sales totaled USD 189.0 Million, while software sales totaled USD 485.9 Million. GameStop reported that hardware sales decreased reflecting anticipated next generation console launches in 2020. Meanwhile, software sales were boosted by Nintendo Switch software titles, but was more than offset by weaker title launches across other consoles in the quarter.
Pre-owned and value video game products reported sales of USD 344.2 Million, decreasing from USD 396.9 Million the same quarter a year ago. Software sales and pre-owned and value video game products accounted for more than half of GameStop’s total revenue during the quarter.
Accessories sales decreased by 13.4%, while pre-owned sales declined by 13.3% with declines in both hardware and software. On the other hand, collectibles sales increased by 4.3%, with continued growth in both global and domestic stores.
For the fiscal year, GameStop is expecting earnings in the range of USD 0.10 to USD 0.20 per share and comparable store sales decline in the high-teens. Analysts anticipated earnings of USD 1.21 per share for the period.