Tech

GameStop forecasts a surprise first-quarter loss, shares fall

Key Points
  • GameStop on Tuesday warned of a potential first-quarter loss.
  • The world's largest video game retailer is wrestling with slowing sales of video games and consoles at its stores.
  • GameStop has struggled in the face of a changing retail landscape and in March named retail industry veteran George Sherman chief executive officer, its fifth CEO in just over a year.
Pedestrians pass in front of a GameStop store in New York
Scott Mlyn | CNBC

GameStop on Tuesday warned of a potential first-quarter loss as the world's largest video game retailer wrestles with slowing sales of video games and consoles at its stores.

Shares of the company fell 7.52 percent to $9.34 in extended trading after GameStop also reported quarterly revenue below analysts' estimates.

GameStop has struggled in the face of a changing retail landscape and in March named retail industry veteran George Sherman chief executive officer, its fifth CEO in just over a year.

The company said it now expects earnings of breakeven to a loss of 5 cents per share for the quarter, adding that it would not provide annual earnings forecast at this time. Analysts on average were expecting a profit of 17 cents per share, according to IBES data from Refinitiv.

The company also forecast a 5 to 10 percent drop in total and same-store sales for 2019.

For the latest quarter, GameStop posted adjusted earnings of $1.60 per share, scraping past analysts' estimates of $1.58 per share.

Net sales fell 7.6 percent to $3.06 billion, missing estimates of $3.28 billion.

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Key Points
  • GameStop announces a series of esports partnerships that deepen its foray into an industry projected to exceed $1 billion in revenue by the end of 2019.
  • GameStop wants to foster the Dallas-area esports community as well as to become the "Pop Warner" or the "local YMCA" for esports, GameStop CMO Frank Hamlin says.
  • GameStop's push coincides with the company's attempts to reinvent itself in light of the changing gaming retail landscape.