GameStop Corp. (NYSE: GME) reported sales results for the nine-week holiday period ended December 31, 2016.

Total global sales for the holiday period were $2.50 billion, a 16.4% decline compared to the 2015 holiday sales period. Total comparable store sales decreased 18.7%. Comp trends improved from November to December (-26.6% in Nov. and -13.0% in Dec.) and are expected to continue to improve in January. November’s comp was significantly impacted by weak Call of Duty: Infinite Warfare and Titanfall 2 sales and aggressive console promotions on Thanksgiving Day and Black Friday.

Paul Raines, chief executive officer, stated, “During the holiday period, sales in the video game segment were impacted by industry weakness, promotional pricing pressure and lower in-store traffic, amidst a difficult holiday season for many retailers. We are disappointed with our overall results, but looking broadly, we did see continued growth in our non-physical gaming businesses and we expect this category to approach 40% of our earnings in fiscal 2016. As we look forward to 2017, we remain focused on our transformation plan, which includes growing our non-gaming businesses, right-sizing our global store portfolio by continuously evaluating non-productive stores for closure, and maintaining strong financial discipline, including reducing SG&A by $100 million by 2019.”

Gaming Business Update

• New hardware sales decreased 30.3% as strong sales of recently released new hardware, such as the Nintendo NES Classic, were offset by a greater-than-expected decline in PlayStation 4 and Xbox One hardware sales.
• Sales of new video game software decreased 22.8% due to difficult comparisons to titles launched a year ago, lower average selling prices and decreased store traffic.
• Pre-owned sales outpaced new software sales, but declined 7.9% compared to holiday 2015.
• GameStop’s PowerUp Rewards loyalty program grew 10% over the last twelve months surpassing 51 million members worldwide.
• Based on the data released by NPD, the company calculated that it lost market share in November and to a lesser degree in December. GameStop maintained its overweight share on new titles launched, but less overall sales of new games led to a mix shift to catalog and a slight decline in total market share.

Non-Physical Gaming Business Update

• Non-GAAP digital receipts decreased 9.2% to $295.5 million, or $42.5 million of sales on a GAAP basis, primarily as a result of the decline in new console software sales.
• Driven by an assortment of Pokémon products, Collectibles sales increased 27.1% to $176.9 million, with year-to-date sales reaching our guidance of $450 to $500 million.
• Technology Brands revenues, which are not included in comparable store sales, expanded by 44.0% to $192.4 million, driven by store growth and strong sales of the iPhone 6s, iPhone 7 and Samsung Galaxy S7.

Capital Allocation Update During the holiday period, GameStop repurchased 755,400 shares of common stock at an average price of $22.63, or $17.1 million worth of stock. Year-to-date, the company has repurchased 2.1 million shares at an average price of $25.19, or $53.1 million worth of stock. As of the end of the holiday period, there was approximately $192.2 million remaining of the current share repurchase authorization. The company intends to repurchase $75 million of stock in fiscal 2016.

Guidance UpdateGameStop is reiterating its previously announced fourth quarter and full-year 2016 earnings per share guidance of $2.23 to $2.38 and $3.65 to $3.80, respectively, excluding any year-end impairments and store closing charges, based on a favorable fourth quarter tax rate of between 32.5% and 34.5% compared to the initially forecasted rate of 36.0%. Comparable store sales for the fourth quarter are now expected to be in a range of -18.0% to -16.0% and -12.0 to -10.0% for the fiscal year.