GameStop Corp. (NYSE: GME) reported its fourth quarter financial results after the market close on Tuesday. The Company missed estimates for both revenue and earnings. Additionally, the Company also announced that it would not provide its annual earnings guidance. GameStop shares tanked by 12.1% during Wednesday’s pre-market hours.
For the fourth quarter, GameStop reported earnings of USD 1.45 per share on revenue of USD 3.1 Billion. Bloomberg analysts projected earnings of USD 1.58 per share on revenue of USD 3.27 Billion.
GameStop saw its total global sales fall by 7.6% year-over-year, however, comparable store sales rose by 1.4%. Analysts expected GameStop to report a 2.1% decline in comparable sales. The Company reported that its better-than-expected comparable sales growth was a result of a shift in GameStop’s fiscal calendar for the 53rd week in fiscal 2017 and the timing of the Call of Duty launch.
New hardware sales decreased by 9.8%, while new software sales decreased by 7.8%. GameStop said that an increase in Nintendo Switch sales offset its decline in Xbox One X sales. Weaker sales in hardware and software led to a 21.3% decline in pre-owned sales.
Accessories sales rose by 18.8% year-over-year, driven by continued strength in controller and headset sales.
GameStop announced in its earnings press release that it does not plan on offering an annual earnings guidance. However, the Company still provided its revenue and comparable sales growth for fiscal 2019.
“Given the planned cost savings and profit improvement initiative and the announcement of a new Chief Executive Officer starting on April 15, 2019, the company is not providing annual earnings per share guidance at this time.” said GameStop in its earnings release.
For fiscal 2019, GameStop is expecting total sales decline between 5% to 10%, while comparable store sales are also expected to fall by 5% to 10%.
“As we think about 2019 and beyond, we recognize the challenges facing our pre-owned video game business and are prepared to address them as we continue to evolve our business model going forward. Importantly, we will continue to leverage our powerful brand to drive growth and, with a new cost savings and profit improvement initiative in place, we will focus our efforts on driving profitability. GameStop is a leader in the video game industry, and we remain committed to capitalizing on our leadership position to discover new and unique ways to meet our loyal customers’ entertainment needs and attract new customers.” said Rob Lloyd, GameStop Chief Operating Officer and Chief Financial Officer.
GameStop shares have now fallen by 26% this year.