GameStop (GME) Prelim. Q3 Results Fall Short of Consensus
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GameStop Corp. (NYSE: GME), a global family of specialty retail brands that makes the most popular technologies affordable and simple, today announced selected estimated preliminary financial results for the third quarter and updated full year 2016 guidance.
Based on sales trends of recently released new video games as well as the current sell-thru rate of new video game hardware, GameStop expects to report third quarter 2016 revenue of approximately $2.0 billion, resulting in comparable store sales of -7.0% to -6.0% and third quarter diluted earnings per share estimated to be in the range of $0.45 to $0.49. These estimates represent the most current information available to management and may differ from the actual results to be reported on November 22, 2016 due to final adjustments that may be booked during the financial closing process.
(Street sees Q3 EPS of 56c on revenue of $2.08 billion)
Paul Raines, chief executive officer, stated, "Our expectation was that the new titles released in October would provide a catalyst for new software sales, but despite gaining market share, the titles underperformed our forecasted sales. While the Technology Brands and Collectibles segments continue to grow rapidly, they will not offset the decline in gaming this quarter. We remain excited about the innovation coming into the video game category over the next twelve months, including virtual reality, the Sony PlayStation 4 Pro, the Nintendo Switch and Microsoft's Scorpio. We also remain confident that our diversification strategy will provide long-term growth and shareholder value."
In light of the weaker than expected results through the third quarter, GameStop is revising its full year outlook. For fiscal 2016, the company now expects full year diluted earnings per share to range from $3.65 to $3.80 and comparable store sales to range from -9.5% to -6.5%.
GameStop will report third quarter 2016 results after the market closes on Tuesday, November 22, 2016.
Note: The guidance is based on weighted average shares outstanding of 104,000,000.
Conference Call Information
A conference call with GameStop Corp.'s management to discuss the company's third quarter's financial results is scheduled for November 22, 2016 at 4:00 p.m. CT. The phone number for the call is 888-417-8527 and the pass code is 3312577. This call, along with supplemental information, can be accessed at GameStop Corp.'s investor relations home page at http://investor.GameStop.com/.
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