GameStop fails to meet analysts’ expectations again

GameStop CEO Paul Raines remained optimistic about the company’s fourth quarter results, saying that the launch of new consoles in 2013 marked the return of innovation to the video game category and that the company’s market share increased to an all-time high.



“Our emerging digital and mobile businesses, which did not exist three years ago, surpassed $1 billion of revenue,” he said. “As we push forward into 2014, both the re-energized video game category and our new Technology Brands business unit provide us with solid growth opportunities in the consumer electronics and wireless markets.”



Total global sales for the quarter were $3.68 billion, a 3.4% increase compared to $3.56 billion in the 14-week prior year quarter. Consolidated comparable store sales increased 7.8% compared to the prior year quarter. The company credited the growth in sales and comps to the successful launches of Microsoft’s Xbox One and Sony’s PlayStation 4.



But shares of the company reportedly fell as much as 9.3%, because the company once again failed to meet analysts’ expectations.



Net earnings were $220.5 million, compared to net earnings of $261.1 million in the prior year quarter. Diluted earnings per share were $1.89 compared to diluted earnings per share of $2.15 in the prior year quarter.



For the full year, total global sales were $9.04 billion, a 1.7% increase compared to $8.89 billion in fiscal 2012. Full year consolidated comparable store sales increased 3.8% compared to fiscal 2012, primarily driven by a 29.7% increase in new video game hardware sales related to the launches of Microsoft’s Xbox One and Sony’s PlayStation 4.



New video game software and pre-owned and value products sales declined 2.8% and 4.1%, respectively. Until the fourth quarter, these two categories were impacted by limited new title releases and a decrease in store traffic. Mobile and consumer electronics sales, which include Technology Brands revenues, increased 51.6% over 2012.