GameStop (GME) Shares Sink as Q1 Results In-Line, but Traders Question Outlook

Shares of GameStop (NYSE: GME) are getting slashed today following the company's Q1 results, which were released before the market opened this morning. The stock most recently traded at $22.14 down more than 16% from yesterday's closing price.

Despite in-line quarterly EPS of $0.42 and only a slight miss on sales ($1.98 billion vs. the analyst consensus of $2 billion), traders may be selling the stock today as the video game retailer offered Q2 guidance which was substantially below the Street's estimate: $0.28-$0.33, versus the consensus of $0.40. Further, same store sales for Q1 came in slightly worse than expected at down 1.5%. Moving forward, GameStop sees Q2 same store sales down 8-11%, citing "an unfavorable comparison to the 20% increase in same store sales in the prior year quarter, declining new console unit sales, and the impact of government stimulus checks issued last year."

Taking a look at some other operating metrics, GameStop's CEO, Dan DeMatteo, said that "new video game software sales declined 2.8%" but "lower-priced used products grew a robust 31.9%, illustrating that value is becoming more important" to consumers. GameStop ended the quarter with about $230 million in cash and opened 114 new stores.

UPDATE: Click here for some highlights from the company's Q1 conference call.

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