GameStop holiday sales plummet; lowers forecast
The holiday season brought no cheer to GameStop.
The beleaguered retailer reported that its total global sales plunged 27.5% to $1.83 billion for the nine-week holiday period ended January 4, 2020. Same-store sales fell 24.7%. GameStop said its holiday results were indicative of overall industry trends impacting the video game industry and driven by an accelerated decline in new hardware and software sales, particularly in the month of December
“The accelerated decline in new hardware and software sales coming out of black Friday and throughout the month of December was well below our expectations, reflective of overall industry trends,” said George Sherman, CEO, GameStop. “On a positive note, we continued to see growth in the Nintendo Switch platform, which supports our view that sales will strengthen as new consoles and innovative technology are introduced.”
Given the deceleration in sales trends, particularly in December, GameStop said it now expect fiscal 2019 earnings to be below guidance. Comparable store sales are now expected to decline in the range of 19% to 21% for fiscal 2019. The company, while not updating earnings per share guidance at this time, now expects an adjusted net loss for the fiscal year, with adjusted earnings per diluted share impacted by the further deceleration in sales in December.
“While we expect the challenges that we faced in the fourth quarter to continue into fiscal 2020, we believe we have the right long-term action plans in place to optimize profitability and increase new revenue streams in advance of new console introductions for holiday 2020,” Sherman said.